Reports

Julius Baer Strengthens Capital Structure

Tom Burroughes, Group Editor, London, 6 June 2019

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The capital transaction is designed to improve the Zurich-listed bank’s capital structure and flexibility, it said.

Julius Baer yesterday raised SFr300 million ($301.8 million) in capital via a perpetual securities instrument, with private banks and institutions in Switzerland acting as the main backers.

The capital transaction is designed to improve the Zurich-listed bank’s capital structure and flexibility, it said in a statement.

As reported earlier this week, Singapore’s GIC sovereign wealth fund has built a 3 per cent stake in the private banking group, which describes Asia as its second home market and which books 25 per cent of its assets in that region.

The new securities have been assigned a Moody’s Baa2 instrument rating, which is one notch higher than Julius Baer’s outstanding high-trigger AT1 bonds in the Singapore dollar and US dollar markets. 

The new securities carry a coupon of 2.375 per cent payable annually and have a first reset date on 25 September 2025 or on each coupon date thereafter. The securities are also callable at any time in the three-month period prior to the first reset date. The securities will be issued in standard Swiss franc-market denominations of SFr5,000. An application has been made for provisional admission to trading on the SIX Swiss Exchange.

‎“We are very pleased that the Swiss AT1 investor base has warmly welcomed Julius Baer’s first Swiss franc-denominated AT1 placement since 2014. The Swiss franc market offered an attractive opportunity, enabling the group to issue the securities at a coupon that is the lowest in our AT1 issuance history, thereby further underlining Julius Baer’s sound market standing,” Dieter Enkelmann, chief financial officer of Julius Baer, said.

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