Mitsubishi UFJ to postpone AT1 bond issuance in Credit Suisse fallout

MITSUBISHI UFJ Financial Group will postpone the issuance of Additional Tier-1 (AT1) bonds to mid-May or later from late April, a spokesperson said on Monday (Apr 3), after the Swiss decision to wipe out Credit Suisse bonds rattled the market.

Mitsubishi UFJ decided on the postponement taking into account investor appetite and market conditions, the spokesperson said. He declined to comment on the planned issue amount.

Sources have said Mitsubishi UFJ and Sumitomo Mitsui Financial Group, may put April issuance on hold amid the volatility.

AT1 bonds — a US$275 billion sector known as “contingent convertibles” or “CoCo” bonds — can be converted into equity or written off if a bank’s capital level falls below a certain threshold.

As part of the rescue of Credit Suisse by its rival UBS, Swiss regulator Finma determined that Credit Suisse’s AT1 bonds with a notional value of 16 billion francs (S$23.26 billion) would be wiped out, a decision that stunned global credit markets and angered many holders. REUTERS