Shinsei raises $508 million through preferred securities

Shinsei Bank has marked the return of  president and CEO  Masamoto Yashiro by raising 48.2 billion $508 million, which should have a beneficial impact on its tier-1 capital adequacy ratio. However, the improvement will be only in the order of 0.5%, according to one analyst. In addition, the bank's tumbling earnings will have to stretch to cover roughly 2 billion of annual interest payments on the new securities.

The transaction, which was placed privately, comes in four tranches issued by two overseas special purpose subsidiaries. The first subsidiary is issuing one 19 billion tranche of non-cumulative perpetual preferred securities with a 5.5% coupon until July 2014. The rate will become floating after...