CoCo Call Expectations Come With Safety Warnings After Santander
- Barclays and BBVA sales may fan optimism for calls of old AT1s
- Still, Santander’s skipped call leaves shadow over market
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Barclays Plc and Banco Bilbao Vizcaya Argentaria SA may be planning to redeem some of their riskiest notes, even as the memory of Banco Santander SA’s skipped call leaves a question mark in investors’ minds.
The two lenders both issued new additional Tier 1 notes, or CoCos, last week that could replace older bonds approaching first call dates -- particularly as both banks had sufficient regulatory capital at the end of last year. Still, what would once have been viewed as a certainty now carries a note of caution after Santander broke market convention by passing on a first call in February.