DEAL: Europe’s first TLAC bond

Author: Lizzie Meager | Published: 27 Mar 2017

The first bond issued in Europe to comply with new global rules on total loss-absorbing capacity (TLAC) has revealed substantial differences in approach between EU and US regulators.

The €4 billion ($4.3 billion) bond is Bank of America’s first in Europe since the US Federal Reserve finalised its approach to rules surrounding minimum TLAC in December.

The bank issued the debt out of its holdco to provide structural subordination
Like other US deals of its kind, it was issued via the bank’s holding company, Bank of America Corporation, to provide structural subordination. It’s also the first fixed to floating rate structure in Europe – so far banks have been issuing only fixed for life deals.

Much like deals already done in the US, it includes an option for an early call one year before maturity, when the instrument becomes significantly more expensive for...



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