UBS to mar­ket riski­est bank debt af­ter 2-month hia­tus

The Pak Banker - - FRONT PAGE -

UBS Group AG is mar­ket­ing sub­or­di­nated bonds in the first sale of the riski­est bank debt in Europe since Jan­uary.

The Swiss bank will sell so-called ad­di­tional Tier 1 notes, which are the first to take losses in a cri­sis, to yield about 7 per­cent, ac­cord­ing to a per­son fa­mil­iar with the mat­ter, who isn't au­tho­rized to speak pub­licly and asked not to be iden­ti­fied. Stan­dard & Poor's is ex­pected to rate the dol­lar­de­nom­i­nated se­cu­ri­ties at BB, two lev­els below in­vest­ment grade, the per­son said.

The $102 bil­lion mar­ket for the ju­nior se­cu­ri­ties shut­tered in mid-Jan­uary as in­vestors dumped hold­ings amid con­cern about bank earn­ings and the pos­si­bil­ity that low cap­i­tal lev­els would prompt reg­u­la­tors to pre­vent coupon pay­ments. The notes got a boost last week af­ter the Euro­pean Cen­tral Bank an­nounced a plan to pay banks to bor­row, and the Euro­pean Com­mis­sion sug­gested giv­ing "par­tic­u­lar pro­tec­tion" to in­vestors in the debt. "I'm a bit sur­prised that UBS is the first. The syn­di­cate may be test­ing the wa­ter with a strong name be­fore bring­ing oth­ers."

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.