The Board of Managing Directors of Commerzbank AG has decided to issue a subordinated bond. The bond meets the criteria set out in the Capital Requirements Regulation (CRR) for additional tier 1 capital (AT 1). Subject to the approval of the Supervisory Board, the bond will be issued with an exclusion of the subscription right of the shareholders. The issue serves to further strengthen and structurally optimise the Bank’s regulatory capital.
The AT 1 bond shall be issued in the aggregate nominal amount of at least 500 million US dollars in a specified denomination of 200,000 US dollars. The bond will have a perpetual maturity and a first call date in April 2025. The bond terms include a temporary write-down in the event that the Bank’s Common Equity Tier 1 ratio (CET 1 ratio) drops below 5.125 per cent. The bond will be issued following a roadshow, subject to market conditions.
“We have made good progress in the implementation of our strategy and have built up a strong CET 1 position. The AT 1 issue enables us to optimise our capital structure, particularly in the light of our growth strategy and changes in regulatory requirements,” said Stephan Engels, Chief Financial Officer of Commerzbank. Commerzbank’s CET 1 ratio stood at 12.7 per cent at the end of March 2019, thereby exceeding all regulatory requirements.