Regulatory Capital - All Articles

  • PRA opts for aggressive CRD IV implementation

    The UK’s Prudential Regulation Authority has told the UK’s eight largest banks that they must comply with the capital standards mandated by the fourth European Capital Requirements Directive package by the start of next year, applying the final definitions of capital straight away, as they would at the end of the phasing in period in 2019.

    • 29 Nov 2013
  • Danske shows flexible stance with Scandi five trancher

    Danske Bank seized upon reverse enquiry from Nordic investors after its recent euro tier two deal this week, printing subordinated debt in three Scandinavian currencies and tweaking the structure of individual tranches to better suit investor demand. Scandinavian banks are expected to be big issuers of bank capital next year.

    • 29 Nov 2013
  • DBS tier one tender hits size and price targets

    DBS Group Holdings launched its first Basel III compliant tier one issue at the bottom of the target yield range after holders of S$1.1bn ($878m) of its old-style tier ones responded positively to a tender offer.

    • 29 Nov 2013
  • Rabo breaks T2 record as FIG flies

    The fourth-quarter dollar deluge of bank and financial paper continued this week as investment grade issuance broke a Thanksgiving record.

    • 29 Nov 2013
  • Real money rallies round Nationwide equity alternative

    How many years does it take a mutual to raise equity? At least four, it turns out — as Nationwide proved this week. The building society found a solid £1.6bn of demand for its £500m debut issue of core capital deferred shares (CCDS), a new equity-like instrument that will count towards the firm’s common equity tier one capital ratio.

    • 29 Nov 2013
  • CCB hopes for senior bond pricing uplift on tier two

    The offshore subsidiary of China Construction Bank (CCB) has been meeting investors to educate them on its credit as it considers issuing both a debut senior dollar bond and an international tier two Basel III deal. It is unusual for an issuer to market two bonds at once, but bankers on and away from the deal said a senior issue could smooth the way for the bank capital trade — and that other issuers could follow suit, writes Clare Hammond.

    • 29 Nov 2013
  • Nationwide gives mutuals access to equity after four year process

    Nationwide Building Society found a solid £1.6bn of demand for its £500m issue of core capital deferred shares (CCDS) on Wednesday, a new equity-like instrument that has been four years in the making. UK real money investors came out in force for the trade, with a Nationwide funding chief telling EuroWeek Bank Finance that “you could count the ones that weren’t involved on the fingers of one hand”.

    • 28 Nov 2013
  • Nationwide set to price CCDS in middle of range

    Nationwide Building Society was set on Tuesday to price its ground-breaking new core capital deferred shares (CCDS) deal in the middle of the 9.5%-11.5% range it specified during this week’s roadshow. The deal found strong demand, allowing leads to officially open books with £1.2bn in indications of interest.

    • 27 Nov 2013
  • Danske takes flexible approach to triple Scandi sandwich

    Danske Bank tapped all three Scandinavian currencies on Tuesday. The issuer took a flexible approach to the five tranche trade, tweaking maturities on individual tranches to suit investor demand.

    • 27 Nov 2013
  • Winter deal flurry in FIG

    There’s no sign yet of a winter slowdown in the FIG market, with investors still stuffing new senior unsecured and covered bond paper into their portfolios and even a couple of capital trades due to hit the market. Niche currencies are also enjoying a late surge, with Danske Bank, ABN Amro and ANZ all printing on Tuesday.

    • 27 Nov 2013
  • UBS reshufflles FIG for bank capital onslaught

    UBS has changed the structure of its FIG debt capital markets team in an attempt to win more of the increased supply of bank capital expected in the coming years. The Swiss firm has opted to merge its liability management and capital solutions teams after abandoning plans to hire a new head of capital solutions.

    • 26 Nov 2013
  • Danske responds to reverse enquiries with Scandi sub deal

    Danske Bank is expected to sell a wide-ranging tier two deal on Tuesday afternoon, offering debt in all three Scandinavian currencies. The trade will excite local investors, who have clamoured for access to domestic currency sub debt after the issuer’s tier two euro deal in September.

    • 26 Nov 2013
  • Nationwide bars retail buyers from new capital deal

    Nationwide Building Society has chosen a large minimum tradeable amount for its new core capital deferred shares — a new form of tier one capital for mutuals — meaning that apart from high net worth individuals, retail investors will effectively be barred from participating in the deal.

    • 25 Nov 2013
  • Sterling fanfare for Royal London sub

    UK investors rushed to a £400m subordinated bond from the Royal London Mutual Insurance Society on Friday, placing £2bn of orders in the first sterling tier two deal from a FIG borrower since April. The deal replaces old capital that the firm is buying back in a separate tender offer, which closes on Monday.

    • 25 Nov 2013
  • Royal London launches sterling sub

    The Royal London Mutual Insurance Society has hit the sterling market for a 30 year non-call 10 subordinated bond following meetings with investors in London and Edinburgh earlier this week.

    • 22 Nov 2013
  • Lloyds ends dollar hiatus amid front-end frenzy

    Lloyds Banking Group enjoyed a triumphant return to the dollar market this week as the torrent of issuance from banking and finance names continued.

    • 22 Nov 2013
  • Portugal back in sub debt as BES book nears €3bn

    Banco Espírito Santo brought the first syndicated subordinated bond from a Portuguese bank since 2007 this week, resoundingly putting the country back on the map amid a rally in peripheral sub debt that has supported trades from Italian, Spanish and Irish banks in recent weeks.

    • 22 Nov 2013
  • RLB goes for upper end of tier two size range

    Austrian lender Raiffeisenlandesbank Niederösterreich-Wien printed a larger deal than it was planning this week after getting over €650m of orders for a 10 year tier two bullet on Tuesday.

    • 22 Nov 2013
  • BES proves periphery pull despite tight pricing

    Banco Espírito Santo put Portugal back on the map for subordinated debt on Thursday, bringing the first such deal from a bank in that country since 2009.

    • 21 Nov 2013
  • RLB tier two widens as market softens

    Austrian lender Raiffeisenlandesbank Niederoesterreich-Wien’s 10 year tier two trade widened in the secondary market on Wednesday as FIG investors showed signs of indigestion after a heavy flow of supply over recent days and weeks.

    • 20 Nov 2013
  • FIG bulls begin to tire

    The FIG market is showing its first signs of weakness in quite some time, as investors turn to the yields on offer from higher beta names, leading some other trades to flounder and others still to widen after pricing.

    • 20 Nov 2013
  • RLB twice oversubscribed as sub debt maintains momentum

    Investors continued to mine a rich seam of European tier two debt on Tuesday, as Austrian lender Raiffeisenlandesbank Niederoesterreich-Wien looked to price a €300m 10 year bullet subordinated bond. Meanwhile, the pipeline for subordinated deals is building, with Banco Espírito Santo, Danske Bank and Royal London Mutual all conducting roadshows.

    • 19 Nov 2013
  • Senior bankers should have licences, says Tyrie

    The head of the UK’s banking standards commission has called for a licensing system for senior bankers, complaining that not enough is being done to push such reform through. His comments came as the chairman of the Co-op Group, Len Wardle, resigned after former Co-op Bank chairman Paul Flowers was filmed buying crystal meth and cocaine after his disastrous grilling by MPs two weeks ago.

    • 19 Nov 2013
  • More changes expected at Nomura as RBS man joins FIG team

    Nomura has hired a senior FIG banker from Royal Bank of Scotland to join its financial institutions DCM team, which has been one down since the summer. But market participants expect further changes at the Japanese bank to incorporate the new hire.

    • 18 Nov 2013
  • ING achieves over 50% participation in bond exchange

    ING is set to exchange some €2.6bn of old capital instruments into a pair of new 10 year non-call five tier two notes, which will be more efficient under new capital regulations than the old bonds.

    • 18 Nov 2013
  • BES puts Portugal back on tier two map, Danske to tap Nordic buyers

    Banco Espírito Santo is set to bring the first tier two bond from a Portuguese bank since the financial crisis, riding a wave of positive sentiment in the FIG market that has seen borrowers in Italy and Spain bring successful subordinated bond deals in recent weeks. Elsewhere, Danske Bank will meet Scandinavian investors later this week to gauge interest in a potential Nordic currency tier two deal.

    • 18 Nov 2013
  • Barclays banishes Coco curse with debut AT1

    Barclays managed to stop a run of bad luck in the secondary performance of its contingent capital issues this week, seeing its debut additional tier one deal — the first of its type from a UK borrower — trade up more than two points immediately after pricing. But market participants said the issuer paid up handsomely to ensure that performance, bringing the deal around 25bp wider than investors expected. Will Caiger-Smith reports.

    • 15 Nov 2013
  • Old Mutual increases spend on buyback

    Savings group Old Mutual has increased the amount of bonds it is buying back in a subordinated debt tender offer which will reduce its future gross interest costs by around £10m a year.

    • 15 Nov 2013
  • SEB goes for size as banks pre-fund

    Skandinaviska Enskilda Banken printed its second biggest senior deal on record as financial sector names looked to pre-fund before year-end.

    • 15 Nov 2013
  • Barclays' baby steps for AT1 market

    How many banks does it take to sell an additional tier one deal? Only one, apparently. But that didn’t stop Barclays mandating a cast of 19 lead managers and co-leads for its AT1 debut this week. Reciprocity much? Still, there was much to admire about the deal but it does not mark this market’s coming of age.

    • 15 Nov 2013
  • Barclays opts for size over price with AT1

    Barclays set the precedent for the UK Prudential Regulation Authority’s vision for additional tier one capital instruments on Wednesday, pricing a $2bn non-call five perpetual deal at 8.25%. The trade was well received, but market participants said it was clear the issuer had paid up for the deal, opting for size over price.

    • 14 Nov 2013
  • Old Mutual increases spend on buyback

    Savings group Old Mutual has increased the amount of bonds it is buying back in a subordinated debt tender offer which will reduce its future gross interest costs by around £10m a year.

    • 14 Nov 2013
  • Final size could determine success of Barclays AT1 debut

    The secondary market performance of Barclays’ debut additional tier one deal, which is expected to be priced on Wednesday afternoon, hangs on the final size of the trade, said market participants. After a strong bookbuild, the issuer looks set to find success — but some are worried it could be tempted to take more out of the market than it should.

    • 13 Nov 2013
  • Barclays steals show in primary supply

    All eyes were on Barclays this week, as it brought the UK’s first additional tier one capital deal. The trade is expected to be priced on Wednesday afternoon and is another test for the nascent market, being only the fourth deal in the format. Elsewhere, the senior and covered bond markets continued their strong run as ravenous investors stampeded for paper in the run up to year end.

    • 13 Nov 2013
  • Co-op Bank shows scope of bail-in challenge

    Even though it wasn’t technically a bail-in, the restructuring of Co-op Bank serves as an example for how to formulate a bondholder-driven bank rescue. The only problem is that the lessons we have learned are hard ones — that forcing losses on bondholders is fraught with difficulty, and that the Co-op template can only really work for small banks.

    • 12 Nov 2013
  • CaixaBank brings back mandatory exchangeable deals to European market

    A €594.3m exchangeable bond into 2.5% of Repsol completed by CaixaBank yesterday was the first European mandatory exchangeable transaction issued since the start of the financial crisis. The deal, which was over five times subscribed, was wrapped up by bookrunners Citi and Morgan Stanley within a few hours, despite investors having to tackle the unfamiliar structure.

    • 12 Nov 2013
  • PBs drive demand for UOB $400m tier one

    United Overseas Bank netted strong demand from private banks for its second Basel III-compliant tier one this year.

    • 12 Nov 2013
  • UOB returns for second Basel III tier one

    United Overseas Bank plans to issue a second Basel III-compliant tier one deal nearly four months after it sold the region’s first.

    • 11 Nov 2013
  • Co-op Bank recovery gives pre-bail-in blueprint

    As its parent, the Co-operative Group, prepares to welcome the Queen and Prince Philip to Manchester to open its new eco-friendly headquarters, the Co-operative Bank is waiting on its subordinated creditors to save it from resolution.

    • 08 Nov 2013
  • Co-op: moral hazard reversed

    It’s a sad day when a so-called ethical bank is found to be on the brink of going bust. It’s an even sadder day when it loses the co-operative ownership that set it apart from others in its field and made it loved by so many. But it’s an even sadder day still when it turns out that, in trying to build a competitor to challenge the hegemony of the big four, the government may have played a role in hastening its demise.

    • 08 Nov 2013
  • ING set to bin inefficient capital in double bond exchange

    ING is looking to issue two new 10 year non-call five tier two bonds in an exchange offer, intended to help the bank comply with new capital rules by getting rid of deals that provide cheap funding but are inefficient as capital under the incoming CRD IV regime.

    • 08 Nov 2013
  • DBS tenders old-style bank capital for Basel III tier ones

    DBS Group Holdings is inviting holders of its outstanding S$1.7bn ($1.4bn) 4.7% old style tier one bonds to exchange them for Basel III-compliant tier ones.

    • 08 Nov 2013
  • Old Mutual tenders for sub deals as part of debt reduction plan

    Savings group Old Mutual has launched a tender offer for a euro-denominated upper tier two bond and a sterling tier one note as part of the debt reduction strategy it announced in February last year.

    • 08 Nov 2013
  • Barclays faces more discerning investors ahead of AT1 debut

    Barclays is set to bring the UK’s first CRD IV-compliant additional tier one trade as early as next week, when it finishes a global roadshow for the dollar-denominated deal. The issuer is riding the coat-tails of other pioneering AT1 issuers, but as the asset class becomes more established, investors are becoming more concerned about when banks will skip coupons than about other loss-absorbing features like write-down and equity conversion.

    • 08 Nov 2013
  • CBA breaks Aussies’ western obsession to launch Samurai

    Commonwealth Bank of Australia has launched a Samurai deal, following a spurt of senior unsecured issuance in euros and sterling from compatriots National Australia Bank and Westpac as Australian banks come out of blackout.

    • 07 Nov 2013
  • Old Mutual tenders for sub deals as part of debt reduction plan

    Savings group Old Mutual has launched a tender offer for a euro-denominated upper tier two bond and a sterling tier one note as part of the debt reduction strategy it announced in February last year.

    • 06 Nov 2013
  • ING set to bin inefficient capital in double bond exchange

    ING is looking to issue two new 10 year non-call five tier two bonds in an exchange offer, intended to help the bank comply with new capital rules by getting rid of deals that provide cheap funding but are inefficient as capital under the incoming CRD IV regime.

    • 06 Nov 2013
  • No big freeze in FIG as ECB and non-farms loom

    What originally looked like being a quiet week in FIG has become much busier as issuers look to borrow money ahead of the European Central Bank’s policy meeting on Thursday and the latest non-farm payrolls figure from the US on Friday.

    • 06 Nov 2013
  • Barclays targets US with first UK AT1

    Barclays is set to bring the UK’s first CRD IV-compliant additional tier one trade as early as next week, when it finishes a global roadshow for a dollar-denominated trade with a 7% common equity tier one equity conversion trigger. The deal will be SEC-registered, as Barclays aims to cash in on the deep liquidity of the dollar market.

    • 05 Nov 2013
  • Co-op Bank’s future rests on bondholder vote

    The Co-operative Bank’s creditors will be asked to vote on the firm’s debt restructuring plan next month. If the bondholders do not approve the new deal, which has materially changed since the restructuring was announced in June, the only other option will be for the bank to be placed into resolution, said the Co-operative Group in a statement on Monday.

    • 04 Nov 2013
  • RLB Noe-Wien to continue Austrian capital push

    Raiffeisenlandesbank Niederöesterreich-Wien will meet accounts next week to discuss a potential euro-denominated subordinated issue, which would be the fourth capital offering from Austria since the beginning of October.

    • 04 Nov 2013
  • China Citic rides structural benefits for tier two

    China Citic Bank International managed to overcome investor concerns about new style tier two bonds on Thursday after providing a friendlier structure than its predecessor in the asset class, ICBC (Asia).

    • 01 Nov 2013
  • CaixaBank tier two corker could spark capital grab

    The rapturous reception given to CaixaBank's tier two deal this week — the first publicly sold tier two benchmark from a Spanish borrower since before the financial crisis — has bankers urging banks in Europe’s periphery to strike while the iron is hot and stock up on much needed capital, writes Will Caiger-Smith.

    • 01 Nov 2013
  • Europeans tap dollars as investors pour in

    Yankee high grade issuance enjoyed its second busiest October on record as risk-hungry investors continued to load up on bank paper.

    • 01 Nov 2013