European Banks Swarm Dollar Market For AT1 Debt: Credit Weekly

European banks have turned to the US dollar market to sell almost $8 billion of bonds that help them boost capital levels. Investors hunting for higher coupons want even more.

Sales of the debt known as AT1s, designed to absorb losses when a bank runs into trouble, are running at a record pace and include deals by Barclays Plc, Spain’s BBVA, and UBS Group AG. Demand has been more than eight times supply on occasion, highlighting money managers’ thirst for yield as spreads for most forms of debt continue to grind tighter.

Selling the bonds in the ...