NEW YORK ( TheStreet) -- Credit Suisse (CS - Get Report) announced Monday that it issued $6.17 billion (CHF 6 billion) in contingent capital, or "coco" bonds, to bolster the bank's balance sheet and satisfy regulators' capital requirements.
Credit Suisse said that it sold $3.5 billion and CHF 2.5 billion in "Tier 1 buffer capital notes" to Qatar Holding and The Olayan Group, a Saudi investment vehicle. The notes have a coupon of USD 9.5% and CHF 9% each, a bank statement said, and are in exchange for $3.5 billion of and CHF 2.5 billion of Tier 1 capital notes issued in 2008.
"The completion of a transaction of this size supports our conviction that contingent capital can be a material source of capital for the banking industry and, in addition, that this will be an attractive instrument for the large group of current investors who hold existing hybrid capital instruments," said Credit Suisse CEO Brady W. Dougan in a statement.
Coco bonds are hybrid securities that convert into equity when, and if, a bank hits trouble and requires a capital boost. They have been pushed by international regulators as a way for banks to