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(Bloomberg) -- UBS Group AG, Switzerland’s biggest lender by assets, hired arrangers for its first public sale of the riskiest type of bank debt, according to a person familiar with the plans.
The Zurich-based company asked its investment bank to arrange investor meetings for the contingent capital denominated in euros and dollars starting Wednesday, the person said, asking not to be identified because they are not authorized to speak publicly. The additional Tier 1 securities may include notes that will be written down if UBS’s capital falls below 7 percent of assets weighted by risk, the person said.
Swiss regulators are putting pressure on banks to strengthen their balance sheets after the government was forced to bail out UBS during the 2008 financial crisis. Additional Tier 1 bonds are undated and have optional coupons, and count as the highest quality capital because they are designed to take losses without triggering a default.
“AT1 is an important component of our future capital structure,” UBS Chief Financial Officer Tom Naratil said today on a conference call with analysts. “We intend to build additional AT1 through external issuance.”
--With assistance from Hannah Benjamin in London.
To contact the reporters on this story: John Glover in London at firstname.lastname@example.org; Elena Logutenkova in Zurich at email@example.com To contact the editors responsible for this story: Shelley Smith at firstname.lastname@example.org Mark McCord