UBS plans to issue as much as $2 billion AT1 bonds in 2024

The Swiss lender is offering $1 billion of securities callable in April 2031 at an initial yield of about 8.375%

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

Bloomberg 7 February 2024

The troubles in the US commercial property market moved to Europe this week

The latest victim was Germany’s Deutsche Pfandbriefbank AG, saw its bonds slump on concern about its exposure to the sector. 

It responded by issuing an unscheduled statement Wednesday that it had increased provisions because of the “persistent weakness of the real estate markets.”

It described the current turmoil as the “greatest real estate crisis since the financial crisis.”

Bloomberg 7 February 2024

US Commercial Real Estate Contagion Is Now Moving to Europe - Bloomberg

What is a CoCo bond?

Sometimes described as high-yield investments with a hand grenade attached, CoCos are the lowest rung of bank debt.


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