According to an announcement by Saxo Bank, the Danish Multi-Asset brokerage has strengthened its capital base by issuing convertible notes and raising equity capital. The Tier 2 Notes which the company sold are valued at €46.25 million ($49.3 million) and the new equity capital raised totals €31.25 million ($33.35 million).
The issues have been taken by CarVal Investors, a global alternative investment fund manager with more than $10 billion under management. The company purchased the notes when investing in the Convertible Tier 2 and became a minority shareholder in Saxo Bank by subscribing to shares equaling to 2.5% of the share capital of the Danish bank before the issue.
The investment is testament to the trust in the bank’s ability to capitalise on significant growth opportunities
Commenting on the successful capital raising effort, the co-CEOs and co-founders of Saxo Bank Kim Fournais and Lars Seier Christensen, said, “In the process of exploring opportunities in the market, we found a combination which allows us to both issue additional capital and raise equity capital which will benefit the Bank, the shareholders, investors and clients.”
“This framework enables Saxo Bank to not only meet potential future capital requirements, but also to consolidate our market position as a solid industry player. The investment is testament to the trust in the bank’s ability to capitalise on significant growth opportunities. We welcome CarVal Investors as new shareholders and note owners,” they concluded.
Saxo Bank A/S and Saxo Bank Group’s regulatory capital ratio are 22.8% and 19.0% respectively
In the aftermath of the Swiss National Bank's move to remove the floor under the Swiss franc, Saxo Bank has announced that it faced losses of up to $107 million in credit exposure. The company has since taken steps to recover some of the lost funds. The €77 million ($82 million) capital boost which the company announces comes to solidify the company's core tier one capital ratio.
The valuation deriving from the equity stake taken by CarVal Investors values the Danish multi-asset brokerage at about €1.25 billion ($1.33 billion).
Following the issues Saxo Bank A/S and Saxo Bank Group’s regulatory capital ratio are 22.8% and 19.0% respectively, while the estimated Solvency need is 13.8% and 12.8% respectively.
