Unique Legal Arrangement for J&T Bank’s Perpetual Bonds

Stricter requirements on a bank’s capital structure have resulted in banks issuing hybrid instruments such as perpetual bonds, which are counted as Tier 1 capital. This marks the first time such an instrument has ever been issued in the Czech Republic. A number of issues had to be resolved beforehand, however, such as the legal structure and acceptability for the regulator.

Compared to issues regarding standard securities, the prep work for perpetual bonds was fairly challenging and lengthy and culminated at the end of June 2014 when the Czech National Bank approved the prospectus and the perpetual bonds were offered to preselected investors, whose interest is said to be strong. KŠB is proud to have advised on such a pioneering and successful deal.

Established in 1998, J&T Bank is a Czech private full-service bank.