(Bloomberg) -- Barclays Plc has attracted strong investor orders for an additional tier 1 sale, in another sign of a revival for the market rocked earlier this year by the historic writedown of Credit Suisse securities.
The London-based bank is selling a benchmark-size — at least $500 million — dollar perpetual AT1 note that's callable in June 2030, with a revised yield of around 10%, according to a person familiar with the matter, who asked not to be identified discussing a private matter. The lender has seen more than $13 billion of investor demand so far for the deal, which is expected to price later on Wednesday.
Last week UBS Group AG sold additional tier 1 notes, its first such issuance since roughly $17 billion of Credit Suisse's AT1s were wiped out as part of a UBS takeover brokered by the Swiss government. The Swiss lender pulled in roughly 10 times the bids for the debt on offer.
The new issuance will bolster Barclays' AT1 capital structure — an important cushion that helps lenders comply with core capital requirements without relying solely on more expensive equity.
Read: Call Them AT1s or CoCos, Here's Why They Can Blow Up: QuickTake
Barclays' securities will convert into equity if a capital adequacy trigger has been breached, setting them apart from the Credit Suisse AT1 notes that had a complete loss imposed by the Swiss authorities.
Global contingent convertible bonds from banks have rebounded from their slump in March. Bloomberg's Global CoCo Banking Statistics Index has rallied 15% since March 20 and the average yield premium has shrunk 240 basis points since then.
--With assistance from Ronan Martin.
(Updates order book details. A previous version of this story was corrected to remove reference to a shareholder vote and revised to clarify that Barclays long has had an equity conversion clause.)
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