Commerzbank launches issuance program for AT1 capital

Maria Nikolova

This is set to enable the bank to gradually issue subordinated bonds with a total nominal value of up to €3 billion.

Commerzbank AG (ETR:CBK) today announces that its Board of Managing Directors has decided to launch an issuance program for additional tier 1 capital (AT1). This is set ti enable the bank to gradually issue subordinated bonds with a total nominal value of up to €3 billion.

Bettina Orlopp, Chief Financial Officer of Commerzbank, explained that over recent years, the bank built up a strong CET 1 position and that it is creating a framework with the AT1 issuance program that can be used flexibly. This is set to enable the bank to further optimise its capital structure and also respond to additional business opportunities. In addition, the issuance program enables Commerzbank to make use of the recent regulatory changes, whereby AT1 can be used to a greater extent to meet the capital requirements (SREP).

The basis for the issuance program is the resolution relating to the authorisation for the Board of Managing Directors passed by the Annual General Meeting in 2019 to issue once or more than once hybrid bonds up until May 21, 2024 which meet the requirements for regulatory recognition as additional core equity. It is planned to exclude the subscription right of the shareholders from the issuances of the program.

In July 2019, Commerzbank issued its first additional tier 1 bond with a volume of $1 billion.

At the end of March 2020, the common equity tier 1 ratio (CET 1 ratio) stood at 13.2 percent and therefore exceeded all regulatory requirements.

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