The highly-anticipated issuance of $3.5bn worth of AT1 bonds by UBS this week has been a “cathartic event” for the market, said Jakub Lichwa, portfolio manager at TwentyFour Asset Management.
On Wednesday (8 November), the Swiss bank started selling its first AT1 bonds since taking over Credit Suisse in March, when $17bn worth of the instruments were wiped out as part of the rescue deal, a move that sparked controversy across European debt markets. The instruments were sold in two tranches that could be redeemed in either five or ten years, with an initial price talk marketed at 10% for a five-year call and 10.125% for a 10-year call. UBS offers first AT1 bonds since Credit Suisse takeover According to Lichwa, the initial pricing implied about 550bps pick-up in spread o...
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