(CercleFinance.com) – ING announced on Friday that it would repay so-called ‘Additional Tier 1’ (AT1) convertible bonds in the amount of $1.25 billion in order to optimize its capital structure.
The Dutch banking group specifies that the reimbursement, which will take effect on April 16, that is to say its planned repurchase date (‘call’), targets its bonds displaying a coupon of 6.5%.
‘Additional Tier 1’ or ‘CoCo’ bonds, created following the 2008 financial crisis, automatically convert into ordinary shares if the capital level of the issuing bank falls below a certain threshold.
Issuers generally strive to refinance their CoCos whenever they can, sometimes as much as six or 12 months before the next scheduled repayment date.
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