*** NEW ISSUE: JULIUS BAER GROUP SGD AT1 – IPG 6.00% AREA ***

11 months after issuing their first SGD AT1, Julius Baer returns with a second one, with a similar structure to the one done last year.

Issuer: Julius Baer Group Ltd
Instrument: Reg S SGD Fixed Rate Reset Perpetual Additional Tier 1 Capital Securities
Ranking: The AT1 securities will be deeply subordinated,
ranking behind Tier 2 instruments, pari passu with
other Additional Tier 1 instruments and senior only
to equity capital
Issuer rating: A3 (negative outlook) by Moody’s
Expected issue rating: Baa3 by Moody’s
Size: SGD Benchmark
Tenor: PerpNC5.5
First call date: [20th] April 2022
Initial Price Guidance: 6.00% area
PB Rebate: 25 cents
Interest: []% per annum payable semi-annually in arrear at a fixed rate to but excluding the First Call Date,
reset at the 5-year Mid Swap Rate plus the Margin at the First Call Date and every five years thereafter
Interest cancellation: The Issuer may, at its sole discretion, elect to
cancel all or part of any interest payment, and shall
be prohibited from making any interest payment to the extent Distributable Items would be exceeded or if prohibited by national regulations or an order of the regulator. Any interest not paid shall not accumulate or be payable at any time thereafter
Optional redemption: Redeemable at the Issuer’s option at the Optional Redemption Date or on [20th April] of each year thereafter at the Prevailing Notional Amount, subject
to the prior approval of the regulator, if then
required
Settlement: [20th] October 2016
Listing: SGX
Denomination: SGD 250,000 x SGD 250,000
Clearing: Euroclear/Clearstream
Governing Law: Swiss Law
Dividend stopper: Restrictions on dividend payments and share repurchases following a cancellation of any interest
payment
Write-down trigger event: Upon the occurrence of a Write-Down Trigger Event, the principal will be permanently written down, pari passu with other instruments with an equal trigger (but before lower trigger instruments), to the extent necessary to remedy the trigger breach.
A Write-Down Trigger Event shall occur if the Issuer’s Group CET1 Ratio is less than 7.00% (transitional). Full permanent principal write-off upon occurrence of a Viability Event
Special Event Redemption: Redeemable upon a Tax Event (imposition of
withholding tax or loss of tax-deductibility) or a
Regulatory Event (full or partial loss of Additional
Tier 1 treatment) at the Prevailing Notional Amount,
subject to the prior approval of the regulator, if
then required
Global Coordinator: CITI
Joint Bookrunners: CITI / DBS Bank Ltd. (B&D) / Deutsche Bank
Co-Manager: Bank Julius Baer
Timing: As early as today

Comp:
BAERVX 5.9 101.40, 5.50% YTC

At 6%, the new AT1 does look interesting compared to the old one which is trading at 5.50% and which has a 5 month shorter first call date.  But as we are all too familiar with the drill by now, the order books will end up multiple times the issue size and the deal will probably end up pricing close to flat to the old one.