Credit Suisse Group AG (CSGN), Switzerland’s second-biggest lender, is planning a sale of contingent capital notes in Swiss francs meeting regulators’ demands that banks strengthen their protection against losses.
The Zurich-based lender plans to meet bond investors in Switzerland on March 5-6 before a possible sale of the securities, according to a banker with knowledge of the arrangements, who declined to be identified because the information is private.
A sale would follow Zurich-based UBS AG (UBSN)’s offering on Feb. 15 when it priced $2 billion of 10-year contingent capital notes that are permanently written down if the bank’s core Tier 1 capital falls below 5 percent or if UBS reaches a point where it would require a bailout to avoid collapse.
Credit Suisse sold contingent convertible securities, or CoCos, in February 2011 that become equity if reported capital falls below 7 percent of assets weighted by risk. It isn’t known what form the bank’s new securities will take, the banker said.
Regulators worldwide are insisting banks hold more, higher- quality capital to prevent financial crises, while Swiss authorities are insisting the nation’s biggest banks hold about twice as much capital as demanded under the international Basel III rules.
Credit Suisse spokesman Adam Bradbury in London declined to comment.
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