Vontobel Holding AG CFO Martin Sieg Castagnola said the Swiss private bank is considering issuing subordinated, equity-linked Additional Tier 1 notes worth between CHF350 million and CHF450 million to partly fund its acquisition of Notenstein La Roche Privatbank AG, Reuters reported June 11.
Castagnola said during an investor presentation that Credit Suisse, Raiffeisen and Vontobel will handle the transaction, Reuters said. The issue price will be based on five-year swaps for the bonds, which will be callable after five years and four months.
The notes would be written off if Vontobel's regulatory core Tier 1 capital ratio were to fall to below 7%, which would mean a loss of more than CHF400 million, Reuters said. The bank expects a core Tier 1 ratio of 12.2% at 2018-end.
In May, Vontobel agreed to acquire 100% of Notenstein La Roche from Raiffeisen Gruppe Switzerland for CHF700 million. The deal is expected to close in the third quarter.
