Erste Group inaugural €500 million AT1 bond issue

Overview:

• Austrian lender Erste Group issued €500 million in Additional Tier 1 (AT1) notes under its €2 billion AT1 programme. 
• The bonds have no maturity date but Erste is entitled to redeem the bonds in 2021.
• The interest rate is fixed at 8.875% until 2021 when it will be reset to a new fixed rate if the bonds are not redeemed by the lender. 
• Morgan Stanley, UBS, JP Morgan, and HSBC were the joint lead managers.
• The bond was placed with institutional investors and listed on the Vienna Stock Exchange.
• Standard & Poor rated the bond BB.

Wai Yee Tsang - Journalist