By Jane Merriman

LONDON, Aug 4 (Reuters Life!) – If your company strives to have a board with a well-rounded view of the world, staffed with pragmatic directors who do their homework and aren’t afraid to ask the tough questions, then it’s probably looking for a few good women right now.

Companies across Europe are being urged to respond to pressure for greater gender diversity in top management, and those which have already embraced their high-flying female executives have discovered that mixed boards broaden perspective, focus more closely on performance and may reduce reckless, ego-driven behaviour.

Some countries, such as Norway and Spain, have introduced quotas requiring a minimum level of female representation on boards. Former British trade minister and ex-Standard Chartered boss Mervyn Davies wants FTSE 100 companies to have 25 percent women on boards by 2015 and EU internal market commissioner Michel Barnier has put gender diversity for bank boards on his radar in the wake of the financial crisis.

But why the sudden push for more women?

The answer seems to be because a lot of research shows that companies with women directors or even just more diverse boards tend to do better than those with executive teams made up entirely of men.

“Women have a different perspective, which can sometimes lead to better decision-making,” said Elin Hurvenes, founder and chair of the Professional Boards Forum, which she set up after the Norwegian government made its demand for more women directors on company boards.

LONDON (Reuters) – Credit Suisse found growing mainstream investor appetite for so-called CoCos when issuing another $2 billion of the bonds which boost a bank’s capital by converting into equity if it runs into trouble.

The Swiss bank is pioneering contingent capital bonds favored by banking regulators. Earlier this week, it sold another to two Middle Eastern investors.

Thursday’s second bond sale gave another boost to a market regulators are keen to see grow, with banks using CoCos to cushion losses and reduce the risk of taxpayer-funded bailouts.

“We have, for some time now, supported the advent of contingent capital in Switzerland and we are pleased to contribute in this practical way to international debate on its role and feasibility,” Credit Suisse chief executive Brady Dougan said.

Together, the two Credit Suisse deals are a positive sign for the nascent market for CoCos, which had initially received a cool reception from traditional fixed income investors, many of whom are not able to hold equity.

Switzerland has encouraged its two biggest banks — UBS and Credit Suisse — to issue the bonds to meet tougher capital rules after the credit crisis.

Dougan said he was “pleased to have successfully completed this next step in our capital plan to transition to the new Swiss regulatory standards well ahead of time.”

LONDON, Oct 18 (Reuters) – Financial regulators favour contingent capital — bonds that convert to equity — as a way to strengthen large banks, but they face a tough job convincing investors to buy these new-fangled instruments in bulk.

A Reuters survey of major corporate bond investors shows that some would be willing to buy the bonds under certain conditions, but they have a lot of questions they want answered. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For the results of the survey please double click on: [ID:nLDE69D0QR] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

“As effectively a high-yield instrument, this will tend to limit the investor base because of (investor) mandates,” said John Hampton, lead manager of UK LV=Asset Management’s corporate bond fund.

“Whilst we are in a low rate environment, these sort of instruments will attract investors into the market — hedge funds, retail investors.”

But he said a big education programme was needed.

Regulators see contingent capital — known as CoCos — as a way to prevent taxpayers having to foot the bill in the future if large banks run into trouble.

During the credit crisis, governments had to rescue failing banks, which left taxpayers with a bail-out bill running into billions of euros.

LONDON (Reuters) – European banks must pull out all the stops to meet a $4 trillion funding challenge in the next two years, which could leave central banks in back-stop mode for longer than they expected.

The International Monetary Fund (IMF) highlighted the bank funding mountain in its semi-annual Global Financial Stability Report, published on Tuesday. This pointed to nearly $4 trillion of bank debt that needs to be refinanced in the next 24 months.

“If the markets hold up — and that’s a big caveat — banks should be able to achieve these (refinancing) goals if they make use of all the tools available, including the commercial paper markets, secured and unsecured bond markets etc.,” said Marc Tempelman, head of debt capital markets for financials at Bank of America Merrill Lynch.

He said some banks had started pre-funding already and some of their funding needs did not have to be addressed via the capital markets.

“There is also a lot happening in terms of private bilateral funding,” he said.

Banks have also been shrinking their balance sheets, which will reduce the funding requirement.

But given the market’s sensitivity to any fresh sovereign shocks, central banks will still need to be there for the financial sector.

LONDON, Sept 29 (Reuters) – European banks could turn to convertible bonds to help raise capital required under new regulations to strengthen them against future crises.

Banks that find it tough to access the equity markets directly could tap the investor base that traditionally buys these instruments, which convert to equity after a fixed term.

These investors could include equity income funds looking to boost yields, as well as retail investors, hedge funds and sovereign wealth funds, bankers say.

“For investors, it’s a way to get income from the coupon on a bond at a time when banks’ dividend yields are low. The investors expect the bond to convert and are happy with the equity risk,” said Prasad Gollakota, head of capital solutions at UBS.

Convertibles won’t be the first choice for national champion banks, who can more easily tap existing shareholders as Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz) is doing to raise more than 9 billion euros. [ID:nLDE68C1FR]

Convertibles upset existing shareholders whose holdings are diluted on conversion. Still, they are an option for firms that urgently need capital unable to find buyers for pure equity.

Some banks, such as Fortis, used convertibles during the credit crisis to shore up capital reserves.

LONDON, Sept 17 (Reuters) – Investors betting European banks will promptly redeem high volumes of subordinated debt could be disappointed, as some look likely to keep the bonds for as long as regulators will let them, to preserve their capital ratios.

Banks have used hybrid Tier 1 bonds in the past to maintain obligatory capital levels to cushion against bad loans, but these bonds will no longer count as capital under new rules unveiled at the weekend by the Basel Committee on Banking Supervision. [ID:nLDE68B0H9]

The new capital regime aims to make banks more robust and better able to withstand future crises.

The regulators have given banks 10 years from 2013 to phase out their hybrids, which are a cross between equity and debt but cheaper than equity because coupon payments are tax deductible.

Clarity on the phase-out, or “grandfathering” period helped spur a big rally in Tier 1 bond spreads in the secondary markets early this week.

“Tier 1s saw a massive uplift on Monday after Basel because people assumed the bonds would get called (redeemed) at their earliest call (redemption) dates,” said one financials credit trader.

CAPITAL PRESSURES

LONDON, Sept 13 (Reuters) – European banks poised to sell new hybrid bonds in the coming weeks to refinance billions of euros of debt might put these on hold due to uncertainty over what will count under a new bank capital regime, bankers and analysts say.

The Basel Committee on Banking Supervision’s new capital plans, unveiled at the weekend, aim to make banks safer and prevent a repeat of the credit crisis. [ID:nLDE68C0R0] [ID:nLDE68B0BP]

The regime will be phased in in stages from Jan. 1 2013, but questions remain over the final shape of new hybrids that regulators want banks to hold. And in the meantime, some banks have hybrids to refinance.

Banks have used Tier 1 hybrid bonds in the past to help boost their capital. These instruments have equity-like characteristics, but are cheaper than equity partly because coupon payments have been tax-deductible.

Under the new Basel rules, regulators want them to be even more like equity, with more loss-absorbing features, making them more costly for banks to sell to investors who will want higher coupons for taking on the extra risk.

REDEMPTIONS

There are some 24 billion euros of Tier 1 bonds with redemptions coming up for European banks in 2010 and 2011, according to data from Bank of America Merrill Lynch.

LONDON, Sept 8 (Reuters) – Dexia Municipal Agency, part of the Franco-Belgian financial group, announced plans on Wednesday to exchange seven covered bonds worth 14.5 billion euros ($18.41 billion) to lengthen its debt maturities and reduce refinancing risk.

The exchange is the first of its kind involving a covered bond and could pave the way for other similar transactions from European banks facing a big hump of bond maturities in the next couple of years.

Dexia’s exchange, which is voluntary, does not bring in fresh cash, but gives the company more breathing space in terms of refinancing outstanding debts.

“The purpose of the offer is to increase the duration of Dexia MA’s liabilities and take advantage of attractive market conditions,” Dexia said in a statement.

The firm said the exchange was also designed to improve secondary market liquidity in Dexia covered bonds.

Dexia aims to exchange the seven bonds with maturities ranging from November 2010 to March 2014 for three new covered bonds with maturities of five, eight and 10 years. Each new series of bonds will have a maximum size of 3 billion euros.

REFINANCING RISK

LONDON, Sept 7 (Reuters) – German insurer Hannover Re (HNRGn.DE: Quote, Profile, Research, Stock Buzz) and UK bank Lloyds (LLOY.L: Quote, Profile, Research, Stock Buzz) on Tuesday joined the growing list of European companies tapping investor appetite for higher yielding assets with plans for subordinated bonds. [NEW/EUB]

Hannover’s deal is only the second insurance hybrid in Europe this year after French insurer AXA (AXAF.PA: Quote, Profile, Research, Stock Buzz) raised 1.3 billion euros ($1.66 billion) in April via a 30-year subordinated bond issue. [ID:nLDE63D248]

Lloyds’ Lower Tier 2 10-year deal [NEW/EUB] denominated in U.S. dollars follows on from a Lower Tier 2 10-year euro bond from Italy’s Monte dei Pachi di Siena (BMPS.MI: Quote, Profile, Research, Stock Buzz) last week.

There have been relatively few bank hybrid deals this year due to uncertainty about what type of hybrid bonds will qualify under new capital rules being finalised by the Basel Committee on Banking Supervision. [ID:nLDE6860N3]

But the solid tone of the credit markets, investor appetite, plus a desire by banks to replenish capital sooner rather than later is likely to trigger a rush of deals before the year-end. [ID:nLDE6810HR]

“There are four insurers looking at doing hybrids,” said one financial services banker at a U.S. investment bank.

He said banks could come to the market with eight to ten Tier 1 hybrid deals before the end of this year and there would be more Tier 2 capital deals as well.

LONDON, Sept 2 (Reuters) – European banks could issue around 25 billion euros ($32 billion) of hybrid bonds in the final quarter of the year as they rush to beat new capital rules that will drive up their costs by billions of dollars.

If current favourable credit market conditions hold, financial borrowers are expected to set a blistering pace of bond issues that count towards Tier 1 and Lower Tier 2 capital and so avoid having to raise capital later, when costs are likely to be higher.

This contrasts starkly with the first nine months of 2010, when the market was repeatedly shut by the sovereign debt crisis and regulatory uncertainty.

“Despite the Basel consultation, the existing rules are still there. None of this (change) has been defined, so in the meantime I think banks will try to slot in additional capital while they can,” said one senior European banker.

Italy’s Monte dei Paschi di Siena (BMPS.MI: Quote, Profile, Research, Stock Buzz) on Thursday, for example, came to market with a Lower Tier 2 subordinated 10-year bond. [ID:nWEA6628] The uncertainty around what type of securities will count as capital and how much banks should hold in the future has caused a hiatus in the supply of new hybrid deals this year.

Banks have issued only 46 of these bonds in 2010, raising a relatively meagre $39 billion across all currencies, according to Thomson Reuters data.

But they faced redemptions of $67.7 billion this year, according to JP Morgan data. In 2011 the number rises to $85 billion and is a still hefty $76 billion in 2012.