Regulatory Capital - All Articles

  • CaixaBank tier two screeches tighter in secondary market

    Other Spanish issuers would do well to take notice of CaixaBank’s return to the tier two market, and should use the good conditions to print their own deals, bankers told EuroWeek Bank Finance on Wednesday. The Spanish lender's Tuesday trade tightened by almost 20bp in the secondary market on Wednesday, having priced pretty much flat to fair value.

    • 30 Oct 2013
  • Spanish tier two keeps up FIG bull run

    With the US Federal Reserve not expected to taper asset purchases until next March, there have been few obstacles to FIG issuance over the past couple of weeks, across senior unsecured, covered bonds and bank capital. There has been a bigger geographical variety of credits in the funding markets — but the periphery is still the place to pick up yield.

    • 30 Oct 2013
  • UBS beats expectations as investment bank posts profit increase

    A year after substantially reducing the size of its investment bank and entirely exiting the supranational and agency debt markets, UBS’s investment bank has posted a strong increase in profits.

    • 29 Oct 2013
  • CaixaBank tier two marks Spanish bank capital comeback

    CaixaBank proved investors’ peripheral penchant on Tuesday, storming into the bank capital market with the first new tier two deal from a Spanish issuer since the financial crisis. The issuer priced the deal with almost no new issue premium, underlining the strength of the recent bull market for southern European FIG debt.

    • 29 Oct 2013
  • CaixaBank tees up tier two as periphery party continues

    Spain’s CaixaBank has mandated leads to sell a euro denominated 10 year non-call five tier two bond after a global investor call on Monday. The trade follows three weeks of peripheral European action in the bank funding markets, with Spanish credits in the frame to continue the trend started by Italian banks over the past fortnight or so.

    • 28 Oct 2013
  • China Citic Bank dares tier two after ICBC

    China CITIC Bank International will embark on investor meetings to sell Asia’s second Basel III-compliant tier two after ICBC (Asia) took the plunge in the beginning of the month and saw its outstanding bonds trade wider in secondaries.

    • 25 Oct 2013
  • Co-op capitulation exposes burden-sharing dilemma for bank investors

    Uncertainty over “precautionary recapitalisations” of stress test failures weighed heavily on bank investors this week even as the FIG sector’s recent rally moved to new heights, writes Will Caiger-Smith.

    • 24 Oct 2013
  • SocGen completes RAC capital buyback

    Société Générale has bought back some 86% of a $1.5bn high yielding perpetual subordinated bond which lost its ratings agency benefit after Standard & Poor’s changed its methodology for calculating the equity content of hybrid debt.

    • 24 Oct 2013
  • UniCredit and Bawag exploit ‘unsustainable’ FIG rally

    Subordinated debt investors on Monday welcomed UniCredit's 12 year non-call seven deal, which was priced 100bp inside where it printed a 10 year non-call five deal about one year ago. The deal underlined the strong bid for high yielding bank paper, but some market participants warned that the latest bull run was unsustainable.

    • 24 Oct 2013
  • KEB offers late chance to grab Basel II bonds

    Korea Exchange Bank took full advantage of the relief that greeted the agreement to re-open the US government and extend the debt ceiling on the night of October 16, pressing ahead with a $200m 10 year Basel II-compliant tier two bond the very next morning in Asia.

    • 24 Oct 2013
  • Nomos completes $600m cap hike to fund Otkritie buy

    Nomos Bank, the Russian private lender, completed a Rb19bn ($600m) capital raise on Thursday, which it will partly use to finance a stake in peer Otkritie Bank.

    • 24 Oct 2013
  • Bawag trades up as market digests supply

    Austria’s Bawag (Bank für Arbeit und Wirtschaft) printed its first tier two deal on Wednesday and was rewarded on Thursday by a strong secondary market performance, after being convinced to increase the size of the deal to accommodate demand.

    • 24 Oct 2013
  • Concerns grow over stress tests’ impact on bank capital market

    The European Central Bank on Wednesday outlined the methodology of its upcoming bank asset quality review (AQR) and stress tests, which will indicate the health of the eurozone’s lenders before the ECB takes over as sole supervisor in November 2014. The results of the tests will inevitably lead to some banks needing to bolster their capital — but ECB president Mario Draghi is concerned that new state aid rules around the use of public rescue funds could undermine investors’ appetite for bank capital.

    • 23 Oct 2013
  • Bawag hits reverse enquiry to resurrect tier two deal

    Austria’s Bank für Arbeit und Wirtschaft, otherwise known as Bawag, rode the wave of positive sentiment in the FIG funding and capital markets on Wednesday to resurrect the tier two transaction it abandoned in September.

    • 23 Oct 2013
  • SocGen completes RAC capital buyback

    Société Générale has bought back some 86% of a $1.5bn of a high yielding perpetual subordinated bond which lost its ratings agency benefit after Standard & Poor’s changed its methodology for calculating the equity content of hybrid debt.

    • 23 Oct 2013
  • Italians dominate in perfect conditions for FIG

    Given the strong backdrop in the funding markets Italian banks have continued their issuance barrage, their success leading Austrian lender Bawag to resurrect the potential tier two deal it cancelled several weeks ago.

    • 23 Oct 2013
  • UniCredit capitalises on tightening tier two spreads

    UniCredit on Monday printed €1bn of 12 year non-call seven tier two paper some 100bp inside where it priced a similar deal a year ago, taking advantage of recent tightening in Italian secondary spreads to pre-fund for 2014.

    • 22 Oct 2013
  • Italian spree continues with Intesa and BPM

    Italian FIG issuers continued their assault on the funding markets on Tuesday, with Intesa Sanpaolo and Banca Popolare Milano following Monday’s deals from UniCredit and UBI Banca. With Italy having overcome its recent political travails and the market enjoying a rally that some bankers fear is unsustainable, borrowers are falling over themselves to pre-fund for 2014 — a year which Moody's expects to be difficult for Italian banks.

    • 22 Oct 2013
  • UniCredit rides 12nc7 wave amid ‘unsustainable’ rally

    UniCredit had a strong response from European investors on Monday morning when it launched a 12 year non-call seven tier two deal, despite only offering a minimal new issue premium and little concession to where it would have priced a similar deal but with a bullet maturity. However, after three weeks of almost continual tightening in the FIG credit markets, bankers expressed concern that the good conditions were unsustainable.

    • 21 Oct 2013
  • Allianz blowout marks euro FIG market muscle

    Slipstreaming on Thursday’s post-US debt compromise relief rally, Allianz attracted “crazy” demand of €8.5bn for a perpetual that underscored the euro FIG sector’s resilience throughout the crisis in Washington DC, writes Will Caiger-Smith.

    • 17 Oct 2013
  • SocGen follows Danske in RAC buyback compromise

    Société Générale has launched a tender offer on its $1.5bn perpetual subordinated bond, after ratings agency Standard & Poor’s changed its methodology for calculating equity content for hybrid debt. The deal follows a similar move by Danske Bank just under a month ago, with the issuer offering a compromise to buy the notes back just below market value rather than calling them at par.

    • 17 Oct 2013
  • BAML makes post-results dollar dash

    Bank of America Merrill Lynch took advantage of surging investor demand for high grade credit as it plundered the market for $3bn on Thursday.

    • 17 Oct 2013
  • StanChart gets rewarding secondary performance for return to euros

    Standard Chartered returned to the euro market in tier two format on Monday, and was rewarded with a strong secondary market performance. Its €1.25bn 12 year non-call seven tier two deal tightened well in excess of the 5bp-7bp new issue premium immediately after pricing.

    • 17 Oct 2013
  • Allianz re-opens insurance perp market with enormous book

    Investors piled into the first perpetual subordinated issue from an insurer for several years on Thursday, placing several billion euros worth of orders for Allianz’s perp non-call 10 year trade, despite pricing that was much flat to fair value.

    • 17 Oct 2013
  • Germany blocking SRM as ECB supervisory role is approved

    The European Council on Tuesday failed to make progress on the Single Resolution Mechanism (SRM), although it approved legislation to install the European Central Bank as single supervisor for eurozone banks. As some market participants expressed concern that upcoming stress tests could plunge European banks back into crisis mode, the ECB said it would release more detail on how the tests would be conducted next week.

    • 16 Oct 2013
  • FIG nervously defies debt ceiling fears

    The looming US debt ceiling deadline is weighing more and more on market participants’ minds, but you would not know it from the state of the FIG markets. The euro market is busy in senior unsecured, covered bonds and tier two — and BPCE even managed to get a subordinated dollar bond done on Tuesday.

    • 16 Oct 2013
  • SocGen follows Danske in RAC buyback compromise

    Société Générale has launched a tender offer on its $1.5bn perpetual subordinated bond, after ratings agency Standard & Poor’s changed its methodology for calculating equity content for hybrid debt. The deal follows a similar move by Danske Bank just under a month ago, with the issuer offering a compromise to buy the notes back just below market value rather than calling them at par.

    • 15 Oct 2013
  • StanChart pulls in tier two curve with euro performance

    Standard Chartered’s €1.25bn tier two deal performed strongly in the secondary markets, tightening well in excess of the 5bp-7bp new issue premium.

    • 15 Oct 2013
  • StanChart gets competitive with euro callable

    Standard Chartered took aim at a slightly different investor base on Monday as it prepared to price a euro denominated tier two deal, having printed plenty of US dollar-denominated paper in that format this year.

    • 14 Oct 2013
  • Tucker calls for action on cross-border resolution

    Paul Tucker, the outgoing deputy governor of the Bank of England, has called for US authorities to commit to stepping aside to allow the UK to resolve North American subsidiaries of UK-domiciled banking groups in the case of bank failures.

    • 14 Oct 2013
  • Investors get on board with RBI for new tier two

    Raiffeisen Bank International overcame investors’ concerns about potential equity issuance and recent increases in loan loss provisions to sell €500m of 10 year tier two paper on Tuesday. The deal traded up on Wednesday, vindicating the issuer’s decision to stick to a small final size.

    • 10 Oct 2013
  • ICBC’s tier two fails to silence pricing debate

    Once the dust had settled on last Thursday's Basel III-compliant tier two bond in dollars from Industrial and Commercial Bank of China (Asia) — the first in the region — the deal came in for mixed reviews as the bonds widened through the week.

    • 10 Oct 2013
  • Sydbank hits threes as Dexia brings GG

    Danish lender Sydbank jumped into a healthy senior unsecured market on Thursday, offering investors 80bp over mid-swaps for three year euro-denominated paper. Elsewhere, Dexia’s long-awaited government guaranteed bond hit screens.

    • 10 Oct 2013
  • RBI overcomes complicated credit story to price tier two

    Raiffeisen Bank International overcame investors’ concerns about potential equity issuance and recent increases in loan loss provisions to sell €500m of 10 year tier two paper on Tuesday. The deal traded up on Wednesday, vindicating the issuer’s choice to keep the deal small.

    • 09 Oct 2013
  • European FIG market ablaze despite US shutdown

    Several European borrowers launched well received senior unsecured deals and covered bonds this week making a mockery of fears over the impact of the US’s shutdown troubles. CaixaBank, Banca Popolare dell’Emilia Romagna and UBI Banca flew the flag for the periphery, while Lloyds Bank hit the senior market after an 18 month hiatus.

    • 09 Oct 2013
  • RBI tier two: bankers question depth of demand.

    Raiffeisen Bank International on Tuesday provided more action in the tier two market, bringing a 10 year bullet trade in euros, which was set to be priced later in the afternoon. The deal highlighted the health of the European market even in the face of the US shutdown, but some bankers said they expected the Austrian lender to attract more orders.

    • 08 Oct 2013
  • Monte dei Paschi lays out €2.5bn restructuring plan

    The board of Monte dei Paschi di Siena, Italy's third largest bank, approved its restructuring plan on Monday evening. As well as a previously announced €2.5bn capital raise, the lender hopes to fully relaunch and restructure the bank.

    • 08 Oct 2013
  • Lloyds breaks 18 month hiatus, CaixaBank hits threes

    Lloyds Bank returned to the senior unsecured market for the first time since last January on Monday, using its rarity value to come at a minimal premium above its secondary curve. Meanwhile, CaixaBank took advantage of a better tone in Europe’s periphery to launch a long three year deal.

    • 07 Oct 2013
  • ICBC sets standard for Asian Basel III tier two bonds

    Industrial and Commercial Bank of China (Asia) printed the region’s first Basel III compliant tier two bond in US dollars on Thursday, providing an important benchmark for bankers and investors in pricing in point of non viability features for upcoming Asian bank capital deals.

    • 04 Oct 2013
  • BPE opens up AT1 for lower-rated issuers with wide appeal

    Hedge funds and institutional investors came out in force on Thursday for a debut additional tier one deal from Banco Popular Español, helping spur orders for the Spanish lender’s €500m no-grow trade to €1.5bn, with 200 accounts involved. The deal proved that at the right price, lower-rated lenders could access the market for deeply subordinated regulatory capital — even in a week that saw Italy’s government almost fall and the US government shut down amid wrangling over its budget.

    • 03 Oct 2013
  • Swiss Re looks to bring cat bond Coco to other markets

    Swiss Re sold a dual trigger Swiss franc contingent capital bond on Monday, including capital and catastrophe-linked triggers. The Coco is the first to incorporate such a structure, and Swiss Re is mulling the possibility of transferring the structure to other markets.

    • 03 Oct 2013
  • ICBC dives into Basel III PONV price mystery

    Industrial and Commercial Bank of China (Asia) launched the region’s first Basel III-compliant tier two bond in US dollars this week, and bankers are hoping the deal will act as a benchmark for calculating premiums on bonds with contentious features that could trigger investor losses.

    • 03 Oct 2013
  • Danske almost cleans up with RAC buyback

    Danske Bank has bought back almost all of the $1bn 2037 bond it issued late last year, a deal designed to get equity credit to boost the firm’s rating with Standard & Poor’s but which was then disqualified from the ratings agency’s methodology.

    • 03 Oct 2013
  • BPE draws on hedge fund demand for AT1

    Banco Popular Español drew heavily on hedge fund demand to build its debut additional tier one capital trade on Thursday, in contrast to recent contingent capital and AT1 trades which have demonstrated higher real money participation.

    • 03 Oct 2013
  • Vienna back in the game as sub deal flies, BPE mandates for AT1

    Vienna Insurance Group proved that it meant something to European investors on Tuesday, printing its first benchmark since cancelling plans for a deal back in 2010. The €500m 30 non-call 10 bond was outperforming the wider market on Wednesday, as Banco Popular Español hit the road to meet investors ahead of a potential additional tier one trade.

    • 02 Oct 2013
  • ICBC opens books on Asia’s first Basel III USD tier two - update

    Industrial and Commercial Bank of China (Asia) is again taking a lead on bank capital after launching Asia’s first US dollar-denominated Basel III compliant tier two bond.

    • 02 Oct 2013
  • Strong response as Vienna joins sub rush

    Vienna Insurance Group joined the post-summer splurge of FIG capital issuance on Tuesday, following up its European roadshow with a €500m no-grow subordinated bond that attracted over €2.5bn of orders.

    • 01 Oct 2013
  • Swiss Re sells innovative hurricane-linked Coco

    Swiss Re sold a dual trigger Swiss franc contingent capital bond on Monday, including capital and catastrophe-linked triggers.

    • 01 Oct 2013