UBS Group is offering dollar-denominated Additional Tier 1 notes just a day after setting out plans to sell billions more of the risky securities in the coming years.
The Swiss lender is offering $1 billion of securities callable in April 2031 at an initial yield of about 8.375%, according to a person with knowledge of the sale, who asked not to be identified because the information is private. It follows UBS’s return to the market in November, when it pulled in $36 billion of orders for $3.5 billion of AT1s across two tranches — a deal that marked a recovery of the market in a tumultuous year.
The new offer comes shortly after the bank outlined its plans to raise as much as $2 billion of the deeply subordinated debt this year and keep lifting a capital buffer by 2029 through the “gradual build of AT1.”
Other European banks are planning Additional Tier 1 issuance of similar sizes this year. BNP Paribas SA is planning to issue €2.5 billion ($2.7 billion) and Deutsche Bank plans €1 billion to €2 billion of AT1 and Tier 2.
Santander has planned €4 billion to €5 billion of hybrid issuance in 2024 having already raised €3.8 billion, including prefunding last year, according to various bank earnings and fixed income presentations seen by Bloomberg.
The market for new AT1s by European banks has been busy this week. Dutch lender ING Groep NV raised more than $1 billion, while Swedbank AB and Jyske Bank A/S sold new debt in dollars and euros, respectively, based on data compiled by Bloomberg.
AT1s — or contingent convertible bonds — were introduced after the financial crisis to ensure bondholders take losses first when a bank is in trouble while taxpayers are off the hook. They suffered the worst day of trading in their history in March after $17 billion of Credit Suisse notes were wiped out as part of the lender’s takeover by UBS.
The market has since recovered, with spreads on a multi-currency index by Bloomberg indicated near their lowest level since last February.
Copyright Bloomberg News
Millennials, Gen Zs are not following the preferences of older generations.
Report reveals how advisors in RIAs, broker-dealers split their time.
Tariffs are the focus as risk aversity intensifies.
Havens are in demand as investors weigh likely impact of tariffs.
Investor concerns have triggered the rotation, although 'the bar is low'.
Participants who receive professional 401(k) advice see higher returns on average, net, than those who don't.
This wealth management platform finally delivers on the technology promises other firms couldn't - giving advisors a better way to scale and serve
