Australia’s largest bank is the latest major lender to issue Additional Tier 1 bonds following the Credit Suisse wipeout.
Commonwealth Bank aims to raise at least A$750 million ($500 million) via an AT1 hybrid security issue, according to a prospectus. The issue will pay between 3 and 3.2 percent above the bank bill swap reference rate.
Commonwealth’s announcement follows the 140 billion yen ($1 billion) issuance of AT notes in April by Sumitomo Mitsui Financial Group. The Japanese lender is aiming for the sale of an additional AT1 bond later this month.
The outlook on senior debt sales remains uncertain due to Credit Suisse’s recent AT1 wipeout of 16 billion francs ($18 billion). There are ongoing legal proceedings, including in Singapore, where bondholders are exploring or seeking recourse.
