Riskiest Bank Bonds’ Next Test is an $84 Billion Redemption Wave
- Recent bond deals from Erste and Intesa drew strong demand
- Market has been recovering from Credit Suisse AT1 writedown
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After bouncing back from Credit Suisse’s AT1 writedown debacle, the market for European banks’ riskiest debt is set to be tested again, with $84 billion notes facing calls in the next two years.
The wave of first call dates may cause a flood of AT1 issuance, because banks typically replace this type of debt with new notes at the earliest opportunity. Some, like Austria’s Erste Group Bank AG and Italy’s Intesa Sanpaolo SpA, have already started to get ahead of the curve with new deals. UBS Group AG said it is monitoring the market as a jumbo $2.5 billion AT1 note approaches its first call.