Hengeler Mueller advises Merkur Bank on the issuance of Additional Tier 1 Capital Instruments

11. March 2014

Merkur Bank, a private bank with its head office in Munich, has increased its additional tier 1 capital. As one of the first banks in Germany, the credit institution has issued additional tier 1 capital instruments in accordance with the new regulatory requirements of the Capital Requirements Regulation and the Capital Requirements Directive IV implementing Basel III. The capital instruments are structured as perpetual bonds that are convertible into common equity tier 1 (CET 1) capital if the CET 1 capital ratio falls below 5.125%. In a first step, Merkur Bank raised EUR 4 m of additional tier 1 capital through these bonds. In the course of the year, the bank expects to issue further EUR 2.5 m additional tier 1 bonds thereby increasing its tier 1 capital by EUR 6.5 m to a total of EUR 52 m.

The balance sheet total of the listed Merkur Bank recently amounted to EUR 744 m. In 2013, the Munich-based private bank increased the operating result of its ordinary business activity by 64% to EUR 11.2 m.

Hengeler Mueller advised Merkur Bank on the structuring and issuance of additional tier 1 capital instruments. The Hengeler Mueller team was led by partner Alexander G. Rang (Banking and Capital Markets) and included associate Maximilian Clostermeyer (both Frankfurt).