SYDNEY: Australian insurer Suncorp Group plans to raise around A$250 million (S$266.77 million) of hybrid securities to strengthen its capital base, it said on Monday, with the bank hoping to tap piles of cash looking for a higher-yielding home. The offer consists of additional tier one capital, a form of capital required by financial regulators to ensure banks have sufficient reserves to avoid the need for a taxpayer-funded bailout in the event of a financial crisis.
Banks sell subordinated debt and hybrids, a mix of debt and equity, because they are cheaper to issue than shares alone. This would be the third such issue this year, following Commonwealth Bank of Australia (CBA)’s A$1.45 billion and financial institution Challenger Ltd’s A$430 million.
