Bank bond issuance falls in the face of low growth, but new rules on total loss-absorbing capacity (TLAC) may prompt the need to refinance existing debt, the FT reports.
“The need for banks to raise capital and other “loss-absorbing” securities may in fact provide some support for new issuance, in particular through refinancing. Zoso Davies, an analyst at Barclays, suggested that new regulation — specifically a need for banks to increase their total loss-absorbing capacity (TLAC) — will be supportive of the need for banks to refinance existing debt, rather than letting it expire. He estimates bank issuance will rise as a result.”
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