AT1 recovery still in balance

摘要

A US$1.5bn Additional Tier 1 bond from ubs drew over US$8bn of demand last week, but the volatile ride it experienced in the secondary market highlighted the fragility of the sector's recovery. That level of oversubscription would typically see a bond trade up in the aftermarket. But the transaction, the first from a European lender since mid-January, fell over a point below its par reoffer price before almost retracing all the losses to 99.7 bid on Friday. "When UBS announced the deal, we all thought 'good on them, they are reopening this space'. As outsiders we wanted the deal to work, to trade up two to three points and cement the recovery in the AT1 market," said a rival banker.