(Seoul = Yonhap Infomax) Reporter Son Ji-hyeon = Shinhan Financial Group announced on the 27th that it plans to exercise a call option (right to claim early redemption) for won-denominated hybrid capital securities worth KRW 135 billion issued in April 2018.
The call option can be exercised after five years have elapsed since the issuance of the bond in April this year.
Shinhan Financial Group made a preemptive call as concerns over the global banking system spread, such as the recent full write-off of hybrid capital securities (AT1, Coco bond) by Credit Suisse (CS) and a sharp rise in Deutsche Bank’s credit default swap (CDS) premium. Announced option exercise action.
Shinhan Financial Group preemptively issued won-denominated hybrid capital securities worth 400 billion won in January, and has the ability to repay early without additional procurement this time.
An official from Shinhan Financial Group said, “We have exercised all call options through a stable capital ratio and preemptive liquidity management, and will exercise them consistently in the future.”
Due to the recent CS crisis, concerns over hybrid capital securities and subordinated debt issued by domestic banks are growing, but the conditions for triggering write-offs (trigger events) have been found to be more stringent than overseas.
According to Korea Investors Service, write-off of hybrid capital securities in Korea is possible when the issuing company designates an insolvent financial institution, and management improvement recommendations or management improvement requests are implemented step by step prior to designation as an insolvent financial institution, so the possibility of sudden write-off is low. .
In addition to Shinhan Financial, Woori Bank and Kyongnam Bank can exercise call options on hybrid capital securities worth KRW 500 billion and KRW 60 billion, respectively, from the 25th of next month.
This was issued in April 2013 under the condition of early repayment after 10 years.
Subsequently, in May, local banks such as Busan Bank with 100 billion won, Kyongnam Bank with 40 billion won, and Daegu Bank with 200 billion won, the date of exercising call options on hybrid capital securities arrived, and in June, Shinhan Bank and Kyongnam Bank called 300 billion won and 100 billion won respectively welcome option exercise
jhson1@yna.co.kr
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This article was serviced at 16:11, 2 hours earlier on the Infomax financial information terminal.
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