Leading retail forex broker Saxo Bank has announced that it has issued additional Tier 1 capital (under the CRD IV and CRR regulation), via a perpetual callable bond offering totaling EUR 42.5 million (about $53 million, or DKK 317 million).
The offering comes just as Saxo Bank reported one of its best months ever volume-wise, with October coming in at $392 billion.
The issuance is a perpetual bond with first call at 26/02-2020 (i.e. in a little over five years), with a coupon of 9.75%, payable semi-annually, until the first call date in early 2020.
The bond will be listed on the Irish Stock Exchange.
Saxo Bank, as its name implies, is formally organized as a licensed commercial bank. Global regulators have been raising capital requirements on banks – whether they really need the capital or not – and it appears as though Saxo Bank took advantage of a positive upswing in bank financing opportunities to raise some more money, and at the same time remain onside of the new capital requirements.
Steen Blaafalk, Saxo Bank CFO, commented:
Saxo Bank has seized an opportunity to meet forthcoming capital requirements and is better equipped to achieve our ambitious goals and strengthen our market position further.
Saxo Bank’s regulatory capital ratio will be 17.5% as of Q3 2014 pro-forma. The solvency need Q3 2014 is 12.4%.