Regulatory Capital - All Articles

  • High-trigger deals going cheap, say analysts

    Investors are not charging issuers enough for the additional risk of high triggers for loss absorption in additional tier one and contingent capital deals, because supply is low and the coupons on these instruments are so enticing, FIG market participants said this week.

    • 31 Jan 2014
  • EBA cracks down on capital call removal

    The European Banking Authority has confirmed that the removal of call options from legacy capital instruments will count as a new issue and that such bonds will only continue to be grandfathered during the transition into CRD 4 if they have five years or more remaining to maturity.

    • 31 Jan 2014
  • EBA cracks down on call removal

    The European Banking Authority has confirmed that the removal of call options from legacy capital instruments will count as a new issue and could stop the resulting bonds from being grandfathered in the transition to CRD 4. The move could prompt issuers of step-up tier one securities to replace quarterly call options with five-yearly calls.

    • 28 Jan 2014
  • Banco Popolare gets out first to beat Italian bank deluge

    Banco Popolare, Italy's fourth-largest bank, launched a €1.5bn capital raise late on Friday night, looking to beat its rivals and seize on positive investor sentiment before the ECB's Asset Quality Review later in the year.

    • 27 Jan 2014
  • Nordic capital issuance imminent

    At least one Nordic issuer is planning to print an additional tier one deal once the quarterly reporting season is over, with plenty of issuers in other regions also planning to tap the growing asset class, bankers told EuroWeek Bank Finance on Monday.

    • 27 Jan 2014
  • Allianz blowout shows Swiss sub appetite

    More issuers could look to follow in the footsteps of Allianz after a blowout subordinated Swiss franc deal on Wednesday, according to Zurich based bankers. The deal — ending Allianz’s 14 year absence from the currency — drew an exceptional response from yield starved Swiss investors.

    • 24 Jan 2014
  • Dah Sing tier two succeeds on rarity and structure

    Hong Kong’s Dah Sing Bank priced its first Basel III compliant tier two bond on Wednesday. The small size, structure and jurisdiction all helped the deal succeed, said bankers on the bond. But buyers singled out rarity value as the most attractive aspect.

    • 24 Jan 2014
  • Investors pile into Allianz Swiss return

    Allianz returned to the Swiss franc market after an absence of 14 years on Wednesday, selling a chunky subordinated deal. The high demand for subordinated paper could encourage more issuers to look at capital trades in the currency, according to syndicate bankers away from the trade.

    • 22 Jan 2014
  • Bendigo courts institutions with first tier two

    Bendigo & Adelaide Bank opted for tier two in its latest Basel III compliant bond in a effort to attract institutional accounts, but it had to offer a substantial pick up over the nearest comparables to satisfy that investor, finally pricing at 280bp over three month BBSW.

    • 22 Jan 2014
  • UniCredit seeks capital relief from US hedge fund

    UniCredit has offloaded default risk on a portfolio of Italian infrastructure projects to Mariner Investment Group, as the US fund launches a specialist business to pursue risk-sharing deals with European banks looking to meet new capital requirements.

    • 21 Jan 2014
  • StanChart tier two finds Singapore dollar sweet for capital raising

    Standard Chartered gave the Singapore dollar market a new first on Friday, selling the debut tier two Basel III bond in that currency. Reverse enquiry from high quality investors and a favourable cross currency swap led the issuer to a 12 year non call seven deal positioning the Singapore dollar market as an alternative for raising bank capital.

    • 21 Jan 2014
  • Dah Sing sets up Basel III tier two bond

    Hong Kong’s Dah Sing Bank is planning its first Basel III compliant tier two bond — also the first from a Hong Kong bank — and aims to sell a 10 year non-call five deal of around $200m.

    • 20 Jan 2014
  • Bright light of AT1 yields blinds buyers to product’s risks

    FIG investors this week gave a clear indication that they would do pretty much anything to get their hands on some yield, placing a whopping $25bn of orders for Crédit Agricole’s $1.75bn debut additional tier one trade as they chased the prize of a 7.875% coupon from one of France’s best-known financial institutions.

    • 17 Jan 2014
  • Gazprombank opens door for Swiss EM capital deals

    Gazprombank and Banco Santander Chile re-opened the Swiss franc market for emerging market issuers on Thursday. Gazprombank sold the first new style tier two bond from an EM country in Swiss francs, with a strong investor response opening the way for other EM issuers to consider subordinated trades in the currency.

    • 17 Jan 2014
  • US in French swoon as Yankee dash continues

    It may not have grabbed the headlines like a French Presidential tryst, but the love affair between the country’s investment grade banks and US investors hit fever pitch this week as a quartet of issuers took home $5.7bn.

    • 17 Jan 2014
  • AT1 — blinded by the yield

    When did you last see a $25bn book for a perpetual non-call 10 year additional tier one capital deal with two triggers for temporary principal write-down, one based on the issuer’s capital ratio and the other based on the capital ratio of its parent group, both of them set at different levels?

    • 17 Jan 2014
  • Crédit Agricole stuns market with $25bn book for debut AT1

    Crédit Agricole pulled together the biggest ever order book for an additional tier one trade on Wednesday, finding a whopping $25bn of demand for its $1.75bn perpetual non-call 10 year debut in the deeply subordinated asset class. If further evidence of the grab for yield was needed, this was it — even though the leads themselves admitted that the deal was priced way through fair value.

    • 16 Jan 2014
  • Gazprombank prepares Swiss tier two

    Gazprombank is set to sell the first tier two bond in Swiss francs from a Russian issuer on Thursday afternoon, while Santander's Chilean subsidiary is in the market with a senior unsecured trade.

    • 16 Jan 2014
  • Crédit Agricole AT1 book surges amid high beta obsession

    Investors piled into Crédit Agricole’s debut additional tier one trade on Wednesday, shrugging off Tuesday’s wobbly trading session and prompting the lead managers on the deal to keep the book size to themselves to avoid further order inflation.

    • 15 Jan 2014
  • Gazprombank makes second attempt at Swiss tier two

    Gazprombank is looking to sell the first tier two bond from a Russian issuer in Swiss francs, with a deal expected on Thursday. This is the issuer’s second attempt at such a trade, following a pulled deal last year.

    • 15 Jan 2014
  • FIG bankers eye quick recovery after blip

    A phenomenal amount of new supply since the start of 2014 meant the FIG market was bound to suffer some indigestion eventually. It did so on Tuesday, after Intesa Sanpaolo struggled to find traction with an eight year senior trade on Monday. Bonds widened on Tuesday and the market took a breather, but things seemed to be back on track on Wednesday.

    • 15 Jan 2014
  • BPCE finds strong demand for US T2

    French lender BPCE found strong demand on the other side of the Atlantic on Monday, pricing a $1.5bn 10 year bullet tier two trade 15bp inside its initial price thoughts. Elsewhere in subordinated debt, Crédit Agricole is wrapping up its additional tier one roadshow and is expected to hit the market with a deal soon.

    • 14 Jan 2014
  • Periphery shines as funding grab continues

    Banco Espírito Santo followed its sovereign into the capital markets on Monday, bringing the first senior bond of the year from a Portuguese bank as credits from Europe’s periphery continued to dominate the deal flow. High beta names found the strongest bid, with national champion Intesa Sanpaolo struggling to gain momentum, which some observers put down to the lower spread it was offering.

    • 13 Jan 2014
  • No Friday siesta as BBVA and Santander CF print senior

    Senior unsecured bank bond issuance continued apace on Friday, as BBVA and Santander Consumer Finance brought deals, capitalising on the frenzied investor demand that supported just over €9bn of euro issuance between Tuesday and Thursday.

    • 10 Jan 2014
  • RBI to print AT1 as part of capital raising plan

    Raiffeisen Bank International is set to print up to €500m worth of additional tier one paper this year, in conjunction with a capital increase of €2bn-€2.25bn, as it seeks to prepare for the implementation of Basel III. The bank has also decided not to sell its Hungarian subsidiary for the moment.

    • 10 Jan 2014
  • Sub debt still in demand as Cairn closes 'opportunistic' legacy fund

    Cairn Capital has closed its Cairn Subordinated Financials Fund, as the recovery in subordinated debt prices has made continued annualised returns of around 25% more difficult. But the asset class is still set to play an important role this year for investors looking to hit yield targets.

    • 10 Jan 2014
  • Raiffeisen hopes to calm capital worries with €2.25bn raise

    Raffeisen Bank International on Wednesday evening finally laid out plans to issue up to €2.25bn of equity, ending countless months of speculation about a capital raise for the Austria-based lender, allowing it to repay state aid.

    • 10 Jan 2014
  • Crédit Agricole preps AT1

    Crédit Agricole added to the flood of new mandates this week by appointing Barclays, Credit Suisse, Goldman Sachs, JP Morgan and UniCredit to run an additional tier one roadshow, starting on Wednesday.

    • 10 Jan 2014
  • Axa grabs £750m in sub debt

    French insurance group Axa returned to the sterling subordinated market after a hiatus of more than a decade on Wednesday, selling a whopping £750m of 40 year non-call 20 paper at 185bp over Gilts.

    • 10 Jan 2014
  • Intesa shows poise in US dollars

    US investor appetite for southern European FIG paper started the year on a strong note, as Intesa Sanpaolo brought its first deal of 2014 this week.

    • 10 Jan 2014
  • Bankia and BoI highlight Europe’s peripheral pull

    Investors threw their weight behind Europe’s recovery this week, gorging themselves on just over €9bn of new euro-denominated senior unsecured paper, much of it from banks in the continent’s peripheral economies. The likes of Bankia and Bank of Ireland would have been called PIIGS two years ago, but this week the only thing they were wallowing in was orders — although ECB president Mario Draghi tried his best to keep the market’s rampant optimism in check on Thursday.

    • 10 Jan 2014
  • Raiffeisen plans to calm capital worries with €2.25bn equity raise

    Raffeisen Bank International finally laid out plans to issue up to €2.25bn of equity on Wednesday evening, ending months of speculation about a capital raise for the Austria-based lender and allowing it to repay state aid.

    • 09 Jan 2014
  • Bankia flies with senior return despite wobbly market

    Spanish banking conglomerate Bankia found overwhelming demand for its first post-crisis senior unsecured deal on Thursday, as investors placed almost €3.5bn of orders for the five year trade. While the broader market showed some signs of weakness, bankers were confident that the FIG feeding frenzy would continue — even the sterling market saw some action, with Axa pricing a €750m 40 non-call 10 year subordinated bond.

    • 09 Jan 2014
  • RBI to print AT1 as part of capital raising plan

    Raiffeisen Bank International is set to print up to €500m worth of additional tier one paper in the next year, in conjunction with a capital increase of €2bn-€2.25bn, as it seeks to prepare for the implementation of Basel III. The bank has also announced it has decided not to sell its Hungarian subsidiary for the moment.

    • 09 Jan 2014
  • Cairn Capital closes “opportunistic” sub debt fund as return opportunities narrow

    Cairn Capital has closed its Cairn Subordinated Financials Fund as the recovery in subordinated debt prices and the prospect of fewer tender offers in the asset class has made continued annualised returns of around 25% more difficult.

    • 08 Jan 2014
  • Svenska finds strong secondary bid

    Svenska Handelsbanken found a wealth of demand for its €1.5bn tier two trade on Tuesday, pulling in some €5bn of orders. Despite a final spread that one banker said was “like senior pricing”, the deal tightened substantially in the secondary market on Wednesday.

    • 08 Jan 2014
  • Bumper start for FIG as periphery proves its popularity

    Credits from Europe’s periphery are raking in orders in the FIG funding markets, but investors are also going starry-eyed at the sight of high-yielding subordinated debt from core jurisdictions. On Tuesday there was just under €11bn equivalent in supply across senior, covered bonds and sub debt in euros and sterling, with Italian credits dominating senior, while sub and covered let core European names get in on the action.

    • 08 Jan 2014
  • Capital gets in gear as Svenska nets T2 and Créd Ag preps AT1

    Svenska Handelsbanken got the tier two capital market off to a flying start on Tuesday morning, gathering a cool €5bn of orders for a €1.5bn 10 year non-call five deal. Meanwhile, Crédit Agricole began preparations for its debut additional tier one capital trade.

    • 07 Jan 2014
  • Regulators flex muscles as Co-op Bank placed under investigation

    The Prudential Regulation Authority and Financial Conduct Authority are to conduct an enforcement investigation into Co-operative Bank, considering the role of former senior managers in the bank’s deterioration, which led to its bondholder-driven rescue at the end of 2013.

    • 07 Jan 2014
  • ANZ set to price dual tranche dollars

    Australia & New Zealand Bank is set to price a US dollar senior unsecured deal on Monday afternoon, before it makes its 2014 debut in euros with a covered bond, expected to price on Tuesday.

    • 06 Jan 2014
  • Generali and Abbey to kick off senior as Europe eases into gear

    Italian insurer Generali and UK lender Abbey National have both mandated leads for euro senior deals with more issuers expected to follow later this week, once several European countries return to work after Monday’s Epiphany holiday.

    • 06 Jan 2014