Credit Suisse is recalling one instrument and will issue another later today at a likely higher interest rate.
Credit Suisse Group has called its US$1.5 billion 7.125 percent high-trigger tier 1 capital instrument for redemption on July 29, the first optional redemption date of the instrument, the bank said in a statement Friday. The instruments are referred to as AT1s.
As reported by finews.com yesterday, the redemption is part of the bank's capital and funding plan for 2022, which includes a plan to issue up to 2 billion Swiss francs in high-trigger tier 1 capital instruments this year.
Today's call was subject to the successful completion and pricing of a new AT1 issue announced yesterday for a minimum of $1.5 billion and subject to approval by the Swiss Financial Market Supervisory Authority Finma. Today's announcement indicates the criteria were met.
Investors Demand High Yield
A new instrument which is being offered later today will have a 9.75 percent interest rate as investors are seeing a high yield from the bank beset by myriad crises, according to a story in the «Financial Times» (behind paywall) citing people familiar.
The instrument that Credit Suisse called today was the last of its AT1s that can be converted into equity. The bank said it was redeeming it to simplify its portfolio.
