Credit Suisse opted to tap investors for a pricier dollar bond in order to repay a $1.5 billion capital-boosting issue.
The bank’s new bond pays 9.75%, considerably above the 7.125% interest rate on the previous high-trigger convertible issue.
Some investors said, however, that choosing not to redeem the bond risked raising concerns that the bank might be unable to repay debt.
Credit Suisse shares closed 2% higher on Friday following the news that it was redeeming its $1.25 billion in AT1 bonds.
Deutsche Bank’s decision not to call its AT1 bond sparked market turmoil earlier this year.
Some argue that borrowing costs are likely to increase as central banks raise interest rates.
For Credit Suisse, the new issuance was an opportunity to send “a message to the market”.
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