When does a Tier 1 capital securities issue command an upper Tier 2 spread? When the securities are US trust preferred. It was only after Bank of America Corporation launched Europe’s first such deal that people wondered why no-one had thought of it earlier.
Early in August, Bank of America issued £850m of 30-year hybrid stock known as trust preferred securities (TruPS). This self-led transaction was the largest sterling-denominated Tier 1 offering yet seen by the market. More notable still, it was the first time that any US bank had sold Tier 1 debt in a currency other than US dollars.
