Regulatory Capital - All Articles

  • Santander looks to switch AT1 pair to Sonia

    Santander began phasing Libor out of two of its outstanding additional tier (AT1) one notes this week, having appointed NatWest Markets to lead the process to restructure the bonds to reference Sonia.

    • 30 Oct 2020
  • Kookmin takes Covid label to bank capital

    South Korea’s Kookmin Bank used a Covid-19 sustainability bond label for its $500m bank capital deal on Wednesday.

    • 29 Oct 2020
  • AT1 market set for second busiest year on record

    Additional tier one supply has already surpassed expectations in 2020, with the asset class on course for its second busiest year of all time.

    • 26 Oct 2020
  • Markets expect EBA guidance will force action on legacy bank capital

    European banks could be set for a wave of calls and tenders on legacy debt instruments, after the European Banking Authority demanded a clean-up this week. Action may not be immediate, however, with markets still seeking clarity on a number of key issues.

    • 23 Oct 2020
  • Bank supply to be muted ahead of US election

    Despite a recent deal surge, investors and issuers are set to pull away from the primary market with just one full week left to go before the US presidential election.

    • 23 Oct 2020
  • UK moves early to dispel fears about bank capital buffers

    Markets rejoiced this week after the Bank of England proposed policy changes that will make it harder for UK lenders to run into automatic restrictions on their additional tier one coupons and equity dividends. The move was seen as a way of addressing concern about ‘buffer usability’, which has come to the fore during the Covid-19 pandemic.

    • 22 Oct 2020
  • A friendlier face for UK bank supervision

    Prudential rules will become more supportive for UK banks after Brexit.

    • 22 Oct 2020
  • La Banque Postale EUR500m 0.875% Jan 31 10.25NC5.25 tier two

    • 22 Oct 2020
  • UnipolSai EUR500m 6.375% PNC10 RT1

    • 22 Oct 2020
  • Rabo finds a way to reward its Certificate holders

    Rabobank intends to make an exceptional distribution on its equity-like Certificates and will avoid breaching the European Central Bank’s dividend ban by paying its investors in more Certificates rather than in cash.

    • 22 Oct 2020
  • BoE to ease MDA rules for UK banks

    The Bank of England said this week that it would loosen some of the rules around the maximum distributable amount for UK banks after Brexit, making it harder for them to trigger restrictions on their additional tier one (AT1) coupons and equity dividends.

    • 21 Oct 2020
  • EBA looks to halt 'infection risk' on legacy capital

    Much of European rule making in wider society has been about preventing infection spreading to the elderly of late. But the European Banking Authority has instead weighed in on the "infection risk" that stems from grandfathered securities.

    • 21 Oct 2020
  • Peak Re bags subordinated bond

    Hong Kong-based Peak Reinsurance Co rolled out a subordinated perpetual bond on Tuesday, netting $250m from the deal.

    • 21 Oct 2020
  • ECB laments lack of CCy cap before Covid

    The European Central Bank said this week that it thought a stronger role for countercyclical capital buffers would be key in making sure that banks use their available resources to boost lending in times of crisis.

    • 20 Oct 2020
  • UnipolSai gives Italy its first RT1 bond

    UnipolSai Assicurazioni was nearly three times subscribed for a restricted tier one (RT1) this week — the first of its kind in Italy. An attractive coupon helped to offset any concerns about Italian sovereign risk or a lack of liquidity in the RT1 market.

    • 20 Oct 2020
  • Quintet debuts with small AT1

    Luxembourg's Quintet Private Bank tapped the market for €125m of additional tier one (AT1) paper on Friday, marking its debut in the asset class.

    • 19 Oct 2020
  • La Banque Postale prints first T2 in three years

    La Banque Postale (LBP) printed €500m of January 2031 non-call January 2026 tier two paper this week, its first in the format in over three years.

    • 19 Oct 2020
  • UnipolSai to call T2s after debut RT1 issuance

    Italian insurer UnipolSai Assicurazioni will be hoping to launch its first restricted tier one (RT1) bond this week, after which it could retire a pair of its lower quality tier two instruments.

    • 19 Oct 2020
  • UK to ditch MREL MDA after Brexit

    The UK government has said that banks will still be able to make investor distributions if they fall below their minimum requirements for own funds and eligible liabilities (MREL) after Brexit — in an early of sign of divergence from the EU rulebook.

    • 19 Oct 2020
  • La Mondiale EUR500m 0.75% Apr 2026 tier three

    • 15 Oct 2020
  • Deal flurry shows rewards await the quick and the brave in FIG

    FIG borrowers may be well funded, but rates are low and market conditions are good enough to support opportunistic issuance — as was shown this week by a slate of deals across the capital structure. Given a volatile end to 2020 is likely, issuers will need to stay alert and take advantage of funding windows as they arise, write Frank Jackman and Bill Thornhill.

    • 15 Oct 2020
  • Greater China bond issuers rush to dollar market

    Four bond issuers from Greater China followed the Chinese ministry of finance into the dollar market on Wednesday, snapping up $1.4bn between them.

    • 15 Oct 2020
  • PIC picks up second tier two of the year

    Pension Insurance Corporation (PIC) sold its second tier two trade of the year, raising £400m with what some investors saw as an opportunistic move.

    • 14 Oct 2020
  • La Mondiale sells rare euro T3

    La Mondiale printed a rare tier three deal on Tuesday to diversify its capital structure, using the strong demand for the unusual product to print around 25bp through fair value.

    • 13 Oct 2020
  • German Ministry of Finance paves way for RT1 debt

    The German Ministry of Finance has paved the way for future restricted tier one issuance (RT1) from the country’s insurance sector. Among those now able to tap the instrument is Allianz, which analysts believe could enter the market next year.

    • 12 Oct 2020
  • ECB sets out Banking Union wish list

    The European Central Bank has set out a plan for relieving tensions between ‘home’ and ‘host’ countries in the Banking Union. The plan relies on introducing stronger and more enforceable mechanisms of intragroup capital and liquidity support, which could then be linked with earlier intervention powers for the supervisor.

    • 12 Oct 2020
  • KBank dips into dollar AT1 market

    Kasikornbank Public Co rolled out its first Basel III-compliant additional tier one subordinated dollar transaction on Thursday. The Thai borrower bagged $500m on the back of an orderbook that reached $2.5bn at its peak.

    • 09 Oct 2020
  • Crédit Agricole EUR750m 4% PNC Dec 27 AT1

    • 08 Oct 2020
  • Nykredit Realkredit EUR500m 4.125% PNC Oct 26 AT1

    • 08 Oct 2020
  • Banks enjoy last hurrah ahead of difficult winter

    Deal arrangers expect bank bond supply will peter out after a flurry of deals this week. Issuers have been enjoying fantastic conditions, but most of them have finished their funding plans early so they can lay low throughout a much-feared fourth quarter. Tyler Davies and Bill Thornhill report.

    • 08 Oct 2020
  • There is no quick fix for bank profitability

    Policymakers should be careful about rushing into action over signs that bank profitability is collapsing.

    • 08 Oct 2020
  • Raiffeisen surprises with Swissie AT1

    Raiffeisen Schweiz surpassed expectations with a self-led additional tier one (AT1) deal on Wednesday, printing Sfr525m ($572.4m) after finding strong international demand.

    • 08 Oct 2020
  • Bankers exalt pricing power in European AT1 market

    Crédit Agricole and Nykredit Realkredit were able to push aggressively on pricing in the additional tier one (AT1) market this week, as they took advantage of favourable supply and demand dynamics.

    • 08 Oct 2020
  • Just Group tightens 50bp for green T2 debut

    Just Group was met with strong demand for a green tier two in the sterling market on Thursday, allowing it to set a coupon of 7% versus initial price thoughts in the 7.5% area.

    • 08 Oct 2020
  • Créd Ag proves popular for AT1 amid Italian M&A rumours

    Crédit Agricole was set to launch a tightly priced new additional tier one (AT1) in the euro market on Wednesday, as investors had to consider whether the French bank was looking to expand its footprint in Italy.

    • 07 Oct 2020
  • Return on equity disappeared in Q2, says ECB

    Euro area banks delivered 0% return on equity in the second quarter, according to new figures from the European Central Bank. The industry is grappling with a decline in income and a sharp surge in loan loss provisions amid the Covid-19 pandemic.

    • 07 Oct 2020
  • Nykredit returns to AT1 with tightly priced deal

    Nykredit Realkredit was set to launch its first additional tier one (AT1) in over five years on Tuesday, tightening its pricing by more than 50bp to close in on a level that looked close to fair value.

    • 06 Oct 2020
  • Tiers for tiers: Just Group to sell green T2, buy back T3

    Just Group is hoping to strengthen its capital position by issuing a debut green bond in tier two format this week, while also buying back some of its existing tier three notes.

    • 06 Oct 2020
  • Banking lobby warns MREL rules are blocking mergers

    The European Banking Federation (EBF) has called on regulators to be more flexible in handing out minimum requirements for own funds and eligible liabilities (MREL) to newly merged businesses, as a way of encouraging consolidation.

    • 05 Oct 2020
  • Dollar strength draws bank supply away from euros

    Unbeatable funding conditions are drawing European banks away from their home currencies and into the dollar market. Deal arrangers predict there will be no let-up in the shift to dollars over the near term, reports Tyler Davies, as issuers prepare for an unsettling fourth quarter.

    • 01 Oct 2020
  • Yield hunters swoop on Caixabank’s AT1

    Caixabank’s attracted exceptionally strong demand for its additional tier one (AT1) transaction on Thursday, which was set to be priced flat to fair value. The deal suggested a clear vote of confidence in the credit, following its recent merger, and underscored investors’ unremitting search for bonds that offer a juicy yield.

    • 01 Oct 2020
  • Lloyds leads the way in phasing Libor out of AT1s

    Lloyds Banking Group asked permission from investors this week to change the reset rates on two of its additional tier one (AT1) securities so they bear reference to Sonia. The move is likely to kick off a trend in sterling and in dollars, as market participants prepare for the death of Libor.

    • 01 Oct 2020