Regulatory Capital - All Articles

  • RAC reduction for SocGen and Danske as S&P changes methodology

    Proposed changes to Standard & Poor’s bank hybrid criteria would remove a key benefit from deals issued in 2012 by Société Générale and Danske Bank which were specifically structured to give the issuers risk adjusted capital (RAC) credit with the ratings agency.

    • 28 Mar 2013
  • Barclays goes Coco-loco, looks to get ahead of pack with ambitious timing

    Barclays threw down the gauntlet to its UK peers on Wednesday, marketing a new contingent capital trade that it hoped to execute before investors disappeared for the Easter holiday — and after the Bank of England identified a £25bn capital hole at the country’s banks, writes Will Caiger-Smith.

    • 28 Mar 2013
  • Achmea woos real money with hybrid

    Dutch Insurer Achmea BV launched a subordinated deal on Tuesday, the first from a Dutch issuer after the nationalisation of SNS Reaal wiped out that borrower’s subordinated bondholders. But Achmea had no problems convincing investors to participate in its €500m no-grow transaction, which attracted over €3bn of orders.

    • 28 Mar 2013
  • Spanish hybrids targeted in recap exercises

    Spain’s Fondo de Reestructuración Ordenada Bancaria (Frob) has announced the initial terms of exchange transactions for hybrid bondholders and preferred shareholders at four Spanish banks, in which investors will be haircut in return for equity.

    • 28 Mar 2013
  • Captain Coco to the rescue as UK banks face £25bn deficit

    Contingent capital issuance is expected to be a top priority for UK lenders this year, as they seek to raise around £25bn of capital to cover unexpected losses on high risk loan portfolios, fines for misconduct and a new approach to risk weighting.

    • 28 Mar 2013
  • Markit Data 1298

    • 28 Mar 2013
  • Barclays postpones Coco until after Easter

    Barclays has given up on the ambitious pre-Easter timetable for its new high-trigger Coco issue, opting to wait until after the long weekend to execute the deal.

    • 28 Mar 2013
  • Easter comes early as Barclays goes Coco-loco

    Barclays began marketing a new contingent capital trade on Wednesday, which it hopes to execute before investors head home for the Easter break. The long-awaited deal was launched alongside a tender offer targeting two US dollar tier two bonds, which is expected to contribute to demand for the new trade.

    • 27 Mar 2013
  • Achmea woos real money with €500m hybrid

    Insurer Achmea BV saw broad demand from real money accounts on Tuesday, in what is the first subordinated debt offering from a Dutch name since the nationalisation of SNS Reaal earlier this year — a process that saw sub bondholders wiped out.

    • 26 Mar 2013
  • Spanish hybrids targeted in recap exercises

    Spain’s Fondo de Reestructuración Ordenada Bancaria (Frob) has announced the initial terms of exchange transactions for hybrid bondholders and preferred shareholders at four Spanish banks, in which investors will be haircut in return for equity.

    • 25 Mar 2013
  • Storebrand braves euros for €300m 30 year sub debt

    Norwegian insurer Storebrand Livsforsikring made light of the uncertain tone in the European market on Thursday, launching a €300m 30 year non-call 10 subordinated bond that attracted strong demand from institutional investors all over Europe.

    • 22 Mar 2013
  • A Valiant attempt, but issuer struggles with debut sub

    Valiant Bank, a universal bank operating in Switzerland, issued its first tier two hybrid security on Wednesday afternoon, promptly increasing it on Thursday. The deal had failed to reach its target of Sfr150m in the initial trade, but the increase brought it up to the desired level.

    • 22 Mar 2013
  • Markit Data 1297

    • 22 Mar 2013
  • Sompo powers into dollar subordinated with Asian backing

    Sompo Insurance Japan raked in $13bn of orders for a long-dated subordinated bond this week, while the euro market lay dormant — save a €300m 30 non-call 10 year trade from Norway’s Storebrand Livsforsikring. Both deals underscored the strength of demand for high yielding subordinated paper, but Sompo in particular proved that the Asian private bank bid was back with a bang.

    • 22 Mar 2013
  • Bail-in thrown into chaos by Cyprus disaster

    Cypriot depositors with less than €100,000 in the bank were offered some welcome relief on Thursday night from the fear of having a chunk of their savings confiscated by the country’s government, which is scrambling to collect the €5.8bn that European authorities have said it must contribute to a €17bn bail-out of its stricken economy.

    • 22 Mar 2013
  • Storebrand braves euros for €300m

    Norwegian insurer Storebrand Livsforsikring shrugged off the uncertain tone in the European market on Thursday, launching a €300m 30 non-call 10 year subordinated bond that attracted strong demand from institutional investors all over Europe.

    • 21 Mar 2013
  • Sompo draws on Asian demand to launch $1.4bn bond

    Sompo Japan Insurance courted investors across the globe with its 60 non-call 10 year subordinated trade, but in the end it was Asian investors that provided the overwhelming bulk of demand, taking around two thirds of the deal.

    • 21 Mar 2013
  • A Valiant attempt, but issuer struggles with debut sub

    Valiant Bank, a universal bank operating in Switzerland, issued its first tier two hybrid security on Wednesday afternoon, increasing the size on Thursday. The deal had failed to reach its target size of Sfr150m in the initial trade, but the increase brought it up to the desired level.

    • 21 Mar 2013
  • Sompo proves resilience of dollars and Asian private bank bid

    Sompo Insurance Japan is pulling in orders for a long-dated subordinated dollar bond while the euro market is dormant, underscoring not only the strength of US dollar assets in the face of European volatility but also a revived bid for high-yielding hybrid debt among Asian private banks.

    • 20 Mar 2013
  • Cyprus bail-out calls debt hierarchy into question

    As depositors of Cypriot banks wait for a Tuesday vote on the country’s bailout deal to seal their fate, FIG market participants have complained that governments are making a mockery of established creditor hierarchies. Some also said the move to impose haircuts even on insured depositors undermined Europe’s plans for a single deposit guarantee scheme.

    • 18 Mar 2013
  • Markit Data 1296

    • 15 Mar 2013
  • Asia back with a bang in AG Insurance US dollar perp

    The Asian bid was back in capital on Thursday as accounts from the region took 43% of AG Insurance’s new $550m US dollar Reg S perp. The response was good news for those already in a swelling capital pipeline, with Achmea Hypotheekbank hiring banks for a possible hybrid capital transaction.

    • 15 Mar 2013
  • Nationwide draws on real money A-list for sub debt return

    Nationwide Building Society stormed into the subordinated debt market on Tuesday, gathering around €6bn of demand for a €1.25bn 10 year non-call five trade which was priced well inside initial pricing thoughts. The deal proved real money accounts’ hunger for paper from UK lenders, which will encourage Nationwide’s peers as they gear up for their own subordinated deals.

    • 15 Mar 2013
  • AG prepares to buy back perp as new book swells

    AG Insurance is preparing to buy back its outstanding €500m perp following a strong investor response to its new US dollar Reg S perp, which saw books swell overnight to reach more than $6bn by Thursday morning.

    • 14 Mar 2013
  • AG Insurance opens after encouraging Nationwide trade

    Belgian firm AG Insurance opened books on a perpetual trade on Wednesday, having completed a roadshow in Asia and Europe while taking tender instructions for a buyback of old subordinated debt. Meanwhile, bankers hope the success of Nationwide Building Society’s 10 sub trade on Tuesday will encourage other lenders to push ahead with issuance.

    • 13 Mar 2013
  • Nationwide kicks off UK sub supply

    More UK borrowers are set to hit the subordinated debt market after Nationwide Building Society brought its first tier two benchmark trade since 2010. The deal’s success is encouraging for other banks planning subordinated trades, such as Barclays and Royal Bank of Scotland, said bankers.

    • 12 Mar 2013
  • Swiss Re’s daring total wipeout Coco raises hackles

    Some investors complained bitterly. But Swiss Re’s permanent writedown contingent capital issue this week was a hit with plenty of others, writes Will Caiger-Smith. With a $5.25bn book, the deal broke new ground in loss-absorbing insurance capital.

    • 08 Mar 2013
  • Santander learns from last year’s auction but pricing still stingy

    Banco Santander has launched a tender offer on €9.9bn equivalent of euro and sterling denominated subordinated debt alongside a separate US offer on a $257.5m subordinated bond. While the any-and-all structure of the offer is friendlier to investors than last August’s unmodified Dutch auction, bankers away from the deal said the pricing was anything but generous.

    • 08 Mar 2013
  • Danish banks ponder options as sub pipeline builds up

    Danish banks are considering contingent capital issuance after their regulator said that loss-absorbing instruments with a 7% trigger — similar to Barclays’ Coco — could be used to meet Pillar II capital requirements.

    • 08 Mar 2013
  • Emirates NBD wows with privately placed sub

    Emirates NBD had a double surprise for bankers this week when it printed a privately placed subordinated debt deal — a rare instrument for a Middle Eastern bank and one that is usually printed in syndicated format.

    • 08 Mar 2013
  • Santander buyback: better, but still stingy

    While Santander appears to have paid heed to the angry market reaction to the subordinated debt buyback it conducted last year using an unmodified Dutch auction process, the levels it is offering on the any-and-all tender offer it announced on Wednesday are anything but generous, liability management specialists told EuroWeek Bank Finance on Thursday.

    • 07 Mar 2013
  • Santander launches any and all sub debt buyback

    Banco Santander has launched a tender offer on €9.9bn equivalent of euro and sterling denominated subordinated debt alongside a separate US offer on a $257.5m subordinated bond. In contrast to last year’s poorly received unmodified Dutch auction, the new deal is an uncapped, any-and-all offer, a more investor friendly structure.

    • 06 Mar 2013
  • Insurers continue sub debt assault

    Belgium and Sweden joined the march of insurance issuers in subordinated debt on Wednesday, with AG Insurance and Storebrand Livforsikring mandating banks to lead investor meetings across Europe and Asia. The potential deals come as the market digests Swiss Re’s contingent capital trade, which is the first permanent write-down Coco from an insurance sector issuer.

    • 06 Mar 2013
  • Investors cry foul but Swiss Re gets strong demand for Coco

    Buyers placed over $3.5bn of orders for Swiss Re’s contingent capital notes on Tuesday, despite some investors’ protestations that the deal’s wipe-out structure left bondholders subordinate to shareholders in an organisation whose solvency was almost impossible to model.

    • 05 Mar 2013
  • Swiss Re set to bring insurance sector’s first permanent writedown Coco

    Swiss Re is meeting investors in its home country on Monday on the final day of the roadshow for a potential contingent capital trade, which is set to be the first Coco from an insurance issuer to feature permanent writedown. Bankers say the deal could inspire more issuance from insurers looking for a more efficient alternative to catastrophe bonds.

    • 04 Mar 2013
  • Danish banks ponder Cocos as sub pipeline builds

    Danish banks are considering contingent capital issuance after their regulator said that loss-absorbing instruments with a 7% trigger — similar to Barclays’ Coco — could be used to meet Pillar II capital requirements. Meanwhile, Swiss Re is talking to domestic investors on the last day of a roadshow for its Coco, which will be the first insurance Coco to feature a permanent write-down structure.

    • 04 Mar 2013
  • Zero recovery for SNS bondholders, ring-fencing likely

    Expropriated bond investors and shareholders of nationalised Dutch lender SNS Reaal will not receive any compensation for their lost investments, the Dutch finance ministry has confirmed. Finance minister Jeroen Dijsselbloem is now looking into ways to ring-fence Dutch banks’ savings and mortgage operations from their investment banking businesses.

    • 04 Mar 2013
  • Confusion over clearing as snazzy Zurich bond switch vexes LM world

    Zurich Insurance Company’s €788m subordinated bond, priced on Monday, looked at first glance like an ambitious but neatly executed deal. But behind the scenes there was confusion over the exact nature of the trade, leaving some liability management specialists vexed, writes Will Caiger-Smith.

    • 01 Mar 2013
  • Insurance sub debt rolls on with Zurich, Macif and Swiss Re

    Insurers took the lead in the subordinated debt market this week, as banks waited for the final agreed texts of new capital regulations to surface after a late-night agreement among EU policymakers on Wednesday. Zurich took €788m out of the market with a curiously structured deal, while Swiss Re neared the end of a contingent capital roadshow.

    • 01 Mar 2013
  • Makit Data 1294

    • 01 Mar 2013