HONG KONG : Asian lenders may find it difficult to replenish their capital by issuing Additional Tier-1 (AT1) bonds, Citigroup said in a research note on Wednesday, after the Swiss authorities' move to wipe out Credit Suisse bonds as part of its takeover deal.The challenge will be particularly acute for a
HONG KONG : Asian lenders may find it difficult to replenish their capital by issuing Additional Tier-1 bonds, Citigroup said in a research note on Wednesday, after the Swiss authorities' move to wipe out Credit Suisse bonds as part of its takeover deal.
Under the takeover deal, the Swiss regulator determined that Credit Suisse's AT1 bonds with a notional value of 16 billion francs would be wiped out, a decision that stunned global credit markets and angered many holders. The write-down to zero at Credit Suisse will produce the largest loss in the $275 billion AT1 market to date.
Asian banks"more reliant on AT1 may face increasing difficulty replenishing capital", which in turn may slow their pace of balance sheet expansion and help tame the inflation outlook and rate hike pace.
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