IFR Senior Strategist
Nordea has launched Sweden’s first contingent capital (CoCo) bond, a US$1.5bn dual-tranche trade that will help it meet new regulatory requirements and boost its capital ratio.
A more than US$30bn order book for a debut CoCo transaction from HSBC restored confidence in Additional Tier 1 deals from European banks last week as the UK lender easily managed to find a home for a colossal US$5.6bn-equivalent triple-tranche deal denominated in US dollars and euros.
The onslaught of financial issuance in the US dollar market in the past fortnight and the spread widening it caused has sent a sharp wake-up call to US banks that they need to start diversifying their sources of funding. The past two weeks have seen US$60bn of FIG issuance, with US$46.8bn of that purely from banks, according to IFR data.