Banks around the world have been issuing new Basle III-compliant tier 1 and 2 capital instruments, and a growing investor base has developed alongside this fast-growing asset class. Latin American banks, however, have largely remained interested observers. To date, the region has seen Basle III-compliant perpetual tier 1 (AT1) transactions only from Banco do Brasil. The state-owned bank’s transactions also pre-dated Brazil’s adoption of Basle III and so had to include areas of structural flexibility to enable post-pricing governance changes to comply with what has now been adopted.
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