The Asia-Pacific market for Additional Tier 1 securities is rebounding from a global selloff sparked by the collapse of Credit Suisse Group AG, as Commonwealth Bank of Australia becomes the latest to plan an offering.
(Bloomberg) — The Asia-Pacific market for Additional Tier 1 securities is rebounding from a global selloff sparked by the collapse of Credit Suisse Group AG, as Commonwealth Bank of Australia becomes the latest to plan an offering.
Australia’s biggest bank on Tuesday detailed plans to sell at least A$750 million ($503 million) of the securities. Pricing is expected to be about 3%-3.2% above the bank bill swap rate, and will be finalized through a bookbuild on May 24, the lender said in the statement.Â
Commonwealth Bank’s announcement follows Sumitomo Mitsui Financial Group Inc.’s sale of 140 billion yen ($1 billion) of AT1 notes last month — the first major global deal in the market since the Credit Suisse wipeout. Japanese peer Mitsubishi UFJ Financial Group Inc. is also targeting the sale of an Additional Tier 1 bond in yen later this month, and may price the debt on May 26.
Banks globally have returned to selling senior debt in recent weeks, but there is still a dearth of AT1 offerings since Credit Suisse’s rescue, according to data compiled by Bloomberg. Created after the 2008 financial crisis, AT1s are the lowest rung of bank debt, producing juicy returns in good times but taking the first hit when a bank runs into trouble.
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