Credit News – Legacy Tier 1 Capital

Moving into 2020, there is now less than two years to go until the grandfathering period for banks’ legacy Tier 1 bonds ends. Not all legacy Tier 1 bonds are structured the same which creates both downside risk and opportunities in the sector.

Background

The EU Capital Requirements Regulation (CRR) was implemented in 2013 with an objective to ensure European banks hold more, and better quality, capital to withstand future financial crises and to impose principal losses on creditors, rather than taxpayers, if an individual bank falls into distress…….

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