Regulatory Capital - All Articles

  • FIG market calm after Fed panic burns fast money

    What was all the fuss about? FIG investors breathed a sigh of relief on Thursday as central bankers queued up to calm what many saw as an over-reaction to a potential US withdrawal from quantitative easing. Senior and sub debt recovered towards the end of the week, soothing investors — although the long term outlook for spreads still worried some.

    • 27 Jun 2013
  • Basel leverage ratio demonstrates shape of things to come

    The standardisation of bank disclosures and capital structures took another stride forward this week as the Basel Committee for Banking Supervision released a consultation paper detailing a set of general measurement principles for calculating banks’ leverage ratios — in the same week that the first pan-European Capital Requirements Regulation was enshrined in the EU’s Official Journal.

    • 27 Jun 2013
  • Yet more questions to be answered on bail-in as national regulators win discretion

    European leaders finally reached an agreement on bail-in rules on Thursday, laying the groundwork for how regulators will force losses upon the shareholders and creditors of failed or failing banks. But the accord gives national regulators a large amount of discretion in how to apply these losses, which market participants say makes it difficult to quantify the risks of senior unsecured bank paper.

    • 27 Jun 2013
  • Basel leverage ratio shows shape of things to come

    The standardisation of bank disclosures and capital structures took another stride forward on Wednesday as the Basel Committee for Banking Supervision released a consultation paper detailing a set of general measurement principles for calculating banks’ leverage ratios.

    • 26 Jun 2013
  • Banks wait their turn as primary supply picks up

    FIG borrowers are holding back on placing new deals into an uncertain backdrop, but dealflow picked up in other sectors on Wednesday, which according to some syndicators may act as a precursor for bank issuance.

    • 26 Jun 2013
  • Market killing senior but covered still breathing

    Senior unsecured bank bonds have continued to drift wider this week. Institutional investors are staying on the sidelines rather than buying into a market that may still fall further and spoil their half year numbers. Fast money is behind the widening, said bankers.

    • 26 Jun 2013
  • UK banks opt for non-sterling funding, but capital only hope for supply

    US dollar investors saw increased supply from UK banks in Q2, but the supply outlook is still bleak across currencies. Overall wholesale funding supply has reduced significantly, leaving capital the only hope for increased supply in Q3, according to the Bank of England’s quarterly liabilities report.

    • 25 Jun 2013
  • BPE downgrade underlines periphery plight

    Standard & Poor’s has pushed Banco Popular Espanol further into non-investment grade territory with a one-notch downgrade of its long-term counterparty rating. BPE received good feedback on a capital markets transaction roadshow earlier this month, but the widening market has scuppered any plans for a deal.

    • 25 Jun 2013
  • Depositor preference row reveals size of bail-in task

    The magnitude — and perhaps the futility — of Europe’s plans for a bail-in mechanism and overarching banking union were on display over the weekend as talks between Eurozone finance ministers collapsed after disagreements over the extent to which depositors should share the burden of bank failures.

    • 24 Jun 2013
  • Fast money still driving FIG market nerves

    Bank paper was showing more weakness on Monday, in line with most other capital markets. But syndicates say institutional investor trading has been limited and that the volatility is keeping both issuers and real money accounts away from the market.

    • 24 Jun 2013
  • Aviva hopes for window with sub roadshow

    UK insurer Aviva has mandated banks for a subordinated bond roadshow next week in Europe, and will be hoping for the recent volatility in secondary markets to subside if it has any hope of bringing a deal.

    • 21 Jun 2013
  • Danske spat over RWAs highlights regulatory risk to new style capital

    Investors and capital structurers are worried that the Danish banking regulator’s proposed changes to Dankse Bank’s risk weightings, which could reduce the issuer’s tier one capital ratio by 1.3%, are a sign of things to come.

    • 20 Jun 2013
  • UK Coco rush unlikely, in spite of PRA demands

    UK banks are unlikely to change their capital issuance plans despite the Prudential Regulatory Authority saying on Thursday that the sector needs a further £13bn of capital on top of what it had already set out to raise in 2013, writes Will Caiger-Smith.

    • 20 Jun 2013
  • RBS doubles up on early-bird buyback bonds

    Royal Bank of Scotland has raised the cap on its capital buyback from $1bn to nearly $2.5bn, following a two-thirds participation on the two largest bonds being targeted.

    • 20 Jun 2013
  • Citi lifts spending cap on notes offer to re-purchase bonds

    Citigroup has increased the spending cap on its tender offer for four senior unsecured and subordinated notes by $5m in order to buy back all bonds tendered by investors.

    • 20 Jun 2013
  • UK Coco rush unlikely despite PRA demands

    UK banks are unlikely to change their capital issuance plans in response to the Prudential Regulatory Authority’s announcement on Thursday that the sector needs an extra £13bn of capital on top of what they had already planned to raise in 2013.

    • 20 Jun 2013
  • Citi lifts spending cap on long-end buyback

    Citigroup has increased the spending cap on its tender offer for four senior unsecured and subordinated notes by $5m in order to buy back all bonds tendered by investors.

    • 18 Jun 2013
  • Moody's piles pressure on Co-op with four-notch downgrade

    Co-operative Bank paper was under more selling pressure on Tuesday as Moody’s announced a raft of ratings downgrades on the UK lender, which revealed plans to tackle a £1.5bn capital shortfall on Monday.

    • 18 Jun 2013
  • SID Bank bumps up buyback

    Slovenska izvozna in razvojna banka (SID Bank) has bought back €299m of its government guaranteed bonds it announced this week. The Slovenian bank increased the tender amount after receiving strong interest from investors.

    • 18 Jun 2013
  • RBS more than doubles sub buyback on early-bird participation

    Royal Bank of Scotland has raised the cap on its capital buyback from $1bn to nearly $2.5bn, following a two-thirds participation on the two largest bonds being targeted.

    • 18 Jun 2013
  • Co-op sub debt tumbles on plan to climb out of £1.5bn capital hole

    The Co-op Bank has suspended coupons on its subordinated debt as it looks to plug the £1.5bn capital hole it revealed on Monday. It expects to launch an exchange offer for sub bondholders in October, which could see them swapped into equity or a new Co-op Group senior unsecured bond.

    • 17 Jun 2013
  • BoE endorses Cocos as ‘resurrection’ tools

    Paul Tucker, deputy governor of the Bank of England, has called for a “richer” regulatory capital accord that goes over and above Basel III, focusing on minimum levels of gone-concern capital to back up the broad regulatory push for bank resolution frameworks.

    • 13 Jun 2013
  • Denmark approves Cocos for pillar two requirements

    The Danish FSA, the country’s financial regulator, has approved the issuance of high trigger contingent convertible (Coco) instruments to fill banks’ pillar two capital requirements, to be implemented nationally to complement the European capital requirements directive package.

    • 13 Jun 2013
  • Higher UK leverage ratio could spur AT1 issuance

    Andrew Tyrie, chair of the UK’s Treasury Select Committee, has called on the Treasury to cede control of the leverage ratio to the Bank of England’s financial policy committee and make it higher than 3%. This could increase UK banks’ requirement for additional tier one capital, bankers told EuroWeek Bank Finance.

    • 13 Jun 2013
  • Capital under pressure but FIG still an issuers’ market despite more widening of spreads

    FIG debt continued its lurching ride over market volatility this week, as bankers and other market participants struggled to understand the increasingly complex dynamics behind demand and supply in the sector and tried to gauge what the future could hold, write Will Caiger-Smith and Tom Porter.

    • 13 Jun 2013
  • FIG remains win-win for issuers, for now

    Banks’ reduced funding needs this year have enabled them to be opportunistic when spreads are tight and stay away when, like this week, conditions aren’t perfect. But investors are reluctant to buy into new deals when they foresee rising interest rates, and will demand a bigger premium cushion when issuers return.

    • 12 Jun 2013
  • Supply outlook darkens as FIG sells off

    Secondary spreads in senior unsecured FIG paper widened by up to 10bp on Tuesday as Europe reacted to a sell-off in Asia overnight. Bankers now expect supply to be subdued as the market slows down into summer and the next reporting season looms.

    • 11 Jun 2013
  • Man cancels $232m of sub debt

    Man Plc, formerly known as Man Group, is buying back $141.4m of sub debt following a cash tender and consent, and will call the remaining notes at par to retire the entire issue.

    • 11 Jun 2013
  • Capital 'a loser' from banking union uncertainty

    Bank capital issuers and investors continue to be hurt by the planned European banking union, according to panellists at Fitch's Global Banking Conference in London.

    • 11 Jun 2013
  • CNP Assurances eyes Reg S return but FIG pipeline dry

    French insurer CNP Assurances is looking at a possible return to the Asian Reg S dollar market, after bringing its inaugural trade in that market last October. Elsewhere, however, prospects for FIG supply are looking bleak, with recent volatility giving well-funded issuers another excuse to stay away.

    • 09 Jun 2013
  • RBS braves wild markets for tier two

    Royal Bank of Scotland paid the price for tapping a volatile market as it printed a $1bn 10 year lower tier subordinated deal.

    • 06 Jun 2013
  • EBA bows to market pressure to banish AT1 subordination fears

    The European Banking Authority this week released a near-final draft of its regulatory technical standards for own funds, cheering potential investors in CRD-compliant additional tier one capital by dropping a proposal to stop banks from paying coupons when hybrid capital instruments are temporarily written down.

    • 06 Jun 2013
  • Something old, something new as RBS launches buyback capped at $1bn

    Royal Bank of Scotland is following its new $1bn subordinated Yankee bond with a tender offer on 11 capital securities, capped at $1bn. The targeted bonds, issued by RBS NV, are denominated in euros, US dollars, Australian dollars and Deutschmarks.

    • 06 Jun 2013
  • Sub pipeline falls flat as Scottish Widows backs out of euro subordinated bond

    Scottish Widows this week backed away from plans to issue a euro-denominated subordinated bond, with Lloyds Banking Group, the issuer’s parent, deciding it did not need the extra capital after recent asset sales.

    • 06 Jun 2013
  • EBA banishes equity subordination fears with technical standards for AT1

    The European Banking Authority has released a near-final draft of its regulatory technical standards for own funds, cheering potential investors in additional tier one capital by dropping a proposal to stop banks from paying coupons when hybrid capital instruments are temporarily written down.

    • 05 Jun 2013
  • Co-op replaces more senior management, mulls bond swap

    The Co-operative group has hired a new finance director and a new non-executive chairman for its financial services arm, as it continues to search for ways to bolster its bank’s capital base after a six-notch downgrade from Moody’s last month.

    • 04 Jun 2013
  • Lloyds pulls Widows sub deal after strong capital generation

    Scottish Widows has decided not to bring the euro-denominated subordinated bond deal it spent last week roadshowing, with Lloyds Banking Group, the issuer’s parent, deciding it did not need the extra capital following recent asset sales.

    • 04 Jun 2013
  • RBS replaces old with new in capital buyback

    Royal Bank of Scotland is following its new $1bn subordinated Yankee bond with a tender offer on 11 capital securities, capped at $1bn. The targeted bonds, issued by RBS NV, are denominated in euros, US dollars, Australian dollars and Deutschmarks.

    • 03 Jun 2013
  • Moody’s review raises bank sub debt challenge

    Moody’s is changing the way it rates subordinated Tier II debt at banks in Asia which will affect new-style and outstanding old-style issues, a move that some fear will further dampen issuance of the securities this year.

    • 02 Jun 2013
  • Rates to define access in sub as Widows mulls euro deal

    Issuers are likely to focus mostly on how benchmark interest rates behave when deciding on their issuance plans in the coming months, following the recent back-up in US Treasury yields which has triggered a broad sell off in credit, bankers told EuroWeek Bank Finance on Monday.

    • 02 Jun 2013