A EUR1 billion or USD1.35 billion bond would be sold by Danske Bank A/S as it replaced a 2037 note it had called last week after it's conflict with Standard and Poor's. The said Tier 2 debt would be due 2023 with a coupon of 3.875% for the first five years.
The said transaction was confirmed by the Copenhagen based financial institution yesterday through a statement. By 2018, the coupon would be adjusted and Danske would have the option of prepaying the bond at its par value.
In a statement made last September 18, it said it would redeem the USD1 billion at a 7.125% interest due on 2037 above par. This comes after a rule change instituted by S&P wiped ut the equity content of the note. This moved Danske's treasurer Steen Blaafalk last Sept 23 to reach out to its investors in order to gauge their interest for the issuance of a replacement bond and its attendand yield. What Blaafalk confirmed was that the new bond would be 'substantially lower' than the 2037 bond coupon.
In a formal statement, Danske said, "The bond loan forms part of Danske bank's ongoing adjustment of its capital structure to future capital requirements for European banks." The said biond would be listed on the Irish Stock Exchange.
Join the Conversation