On 24 February 2011, the Luxembourg Stock Exchange will admit to trading the first contingent convertible bond issued by Credit Suisse Group.
Known as CoCo bonds, such issues are used by banks as a method of being compliant with BASEL III rules in order to meet capital requirements. CoCo bonds are convertible into shares when a bank’s regulatory capital falls below a certain limit.
This issue is the third CoCo bond to be created but is the first to target new money, the first two, from Lloyds and Rabobank, being conversions of existing instruments. The Credit Suisse issue (ISIN: XS0595225318), more fully USD 2 billion “Tier 2 Buffer Capital Notes”, which will pay an annual coupon of 7.875% and with a thirty year maturity, is viewed as a benchmark for other issuers.
The bonds were issued by Credit Suisse Group (Guernsey) I Limited, and guaranteed on a subordinated basis by Credit Suisse Group of Switzerland.
As the European leader for the listing of international bonds, the Luxembourg Stock Exchange is pleased to list this innovative financial instrument, particularly in light of the strong demand for it in the primary market.
