[VIEW] agent=Finance & Investor Relations Partner | scenario_id=22 | rounds=20

--- Round 0 ---
[R0.1] Regulatory Capital Manager (speak, public): Let's discuss the upcoming debt maturities and our regulatory capital needs for 2026. I'm considering a Tier 2 capital issuance and want to understand the implications on our liquidity metrics and earnings.
[R0.2] Treasury Funding Manager (speak, public): We have significant debt maturities in 2026, including $1.2 billion in senior unsecured maturities and $650 million in covered bond maturity. A Tier 2 capital issuance could help address these maturities while also supporting our regulatory capital needs. However, we need to consider the impact on our liquidity metrics and earnings.
[R0.3] Finance & Investor Relations Partner (speak, public): A Tier 2 capital issuance in 2026 could be a viable option to address our debt maturities and regulatory capital needs. However, we need to consider the accounting implications and potential impact on our earnings. The Tier 2 issuance will be amortized over 10 years with a call at year 5, which could affect our interest expense. We should also consider the current market conditions and investor appetite.

--- Round 1 ---
[R1.1] Regulatory Capital Manager (speak, public): To better understand the implications of a Tier 2 capital issuance, can you provide more details on the potential impact on our liquidity metrics and how you foresee the market reacting to such an issuance? Additionally, what are your thoughts on the sizing and timing of the issuance?
[R1.2] Treasury Funding Manager (speak, public): Our liquidity metrics are currently comfortable, with an LCR of 128% against an internal minimum of 115%. A Tier 2 capital issuance would positively impact our liquidity metrics in the short term due to the influx of capital. However, we need to consider the sizing and timing to ensure it aligns with our funding needs and market conditions. We have a favorable issuance window in the week of May 12 before the blackout period starts on June 20. As for market reaction, recent peer Tier 2 spreads have been around T+210 bps with a new issue concession of 15 bps. We should also consider hedging our interest rate risk; we typically swap 70% of our fixed-rate issuance to floating to manage duration, targeting a duration of 2.5 years.
[R1.3] Finance & Investor Relations Partner (speak, public): To address the sizing and timing, I think we should consider our current capital positioning and the investor appetite for Tier 2 capital. We need to ensure that our issuance is well-received by the market. Given the recent peer Tier 2 spreads and the new issue concession, we should size the issuance appropriately to avoid over-supplying the market. Additionally, we need to be mindful of our interest expense budget; the 2026 interest expense budget is set at $420M with a variance threshold of $10M. Any Tier 2 issuance will need to be factored into this budget, considering the amortization profile and potential call date.

--- Round 2 ---
[R2.1] Regulatory Capital Manager (speak, public): Thank you for the detailed insights. To summarize, we have a favorable issuance window in May, and recent peer Tier 2 spreads are around T+210 bps. We should consider sizing the issuance appropriately to avoid over-supplying the market and factor the interest expense into our budget. Given our current CET1 position is 12.4% and MREL headroom is 22.7% against a 24.0% requirement, a Tier 2 issuance of $600M is being considered. I would like to confirm if this sizing aligns with your views on funding needs and market appetite.
[R2.2] Treasury Funding Manager (speak, public): A $600M Tier 2 issuance in May 2026 aligns with our funding needs, considering our senior unsecured maturities and the need to maintain a comfortable liquidity position. The sizing also appears reasonable given our current CET1 position and MREL headroom. However, we should ensure that the coupon is attractive enough to investors, keeping in mind our pre-sounding indications and market comparables. We should also factor in our hedging strategy to manage interest rate risk.
[R2.3] Finance & Investor Relations Partner (speak, public): I agree that a $600M Tier 2 issuance in May 2026 seems reasonable given our current capital positioning and market conditions. However, we need to be cautious about the coupon pricing to ensure it's attractive to investors while managing our interest expense. We should also consider the hedging approach to manage our interest rate risk. Given our NII sensitivity to funding costs, a 50 bps increase in funding costs reduces NII by $18M/year, so we need to balance our pricing with our earnings impact.

--- Round 3 ---
[R3.1] Regulatory Capital Manager (speak, public): Thank you for the detailed discussion. Based on the insights shared, it seems that a $600M Tier 2 issuance in May 2026 is a viable option, considering our funding needs, market conditions, and regulatory capital requirements. To finalize, can we confirm that the proposed hedging approach of swapping 70% of the fixed-rate issuance to floating aligns with our risk management strategy and that the interest expense implications are within our budgetary constraints?
[R3.2] Treasury Funding Manager (speak, public): The proposed hedging approach of swapping 70% of the fixed-rate issuance to floating aligns with our risk management strategy, as it helps manage our interest rate risk and maintain a target duration of 2.5 years. Regarding the interest expense implications, we should be cautious about the coupon pricing to ensure it remains within our budgetary constraints. Based on our pre-sounding indications, an indicative Tier 2 coupon of 6.35% was suggested, with a do-not-exceed level of 6.60%. We should aim to price the issuance competitively while managing our interest expense.
[R3.3] Finance & Investor Relations Partner (speak, public): To confirm, a $600M Tier 2 issuance in May 2026 with a hedging approach of swapping 70% to floating seems viable. We need to ensure the coupon pricing is competitive, around the indicative 6.35% level, to balance investor attractiveness and our interest expense budget of $420M. Let's finalize the recommendation based on these parameters and ensure alignment with our overall financial planning and stakeholder expectations.

--- Round 4 ---
[R4.1] Regulatory Capital Manager (speak, public): Based on the discussion, it appears that a $600M Tier 2 issuance in May 2026 is a prudent decision, considering our funding needs, market conditions, and regulatory capital requirements. The proposed hedging approach and coupon pricing seem reasonable. I recommend proceeding with the Tier 2 issuance as planned, ensuring that the final pricing and terms are aligned with our overall financial planning and stakeholder expectations.
[R4.2] Treasury Funding Manager (speak, public): I agree with the recommendation to proceed with the $600M Tier 2 issuance in May 2026. The proposed hedging approach and coupon pricing are reasonable, and it aligns with our funding needs and risk management strategy. Let's ensure that the final pricing and terms are aligned with our overall financial planning and stakeholder expectations.
[R4.3] Finance & Investor Relations Partner (speak, public): I concur with the recommendation to proceed with the $600M Tier 2 issuance in May 2026. The proposed hedging approach and coupon pricing are reasonable. To ensure alignment with our overall financial planning and stakeholder expectations, let's confirm that the final pricing and terms are within our interest expense budget of $420M and that we've considered the implications on our NII sensitivity.

--- Round 5 ---
[R5.1] Regulatory Capital Manager (speak, public): I believe we have a consensus on proceeding with the $600M Tier 2 issuance in May 2026, with a hedging approach of swapping 70% to floating and targeting a coupon around 6.35%. Let's ensure that the final pricing and terms are within our interest expense budget and aligned with our overall financial planning and stakeholder expectations. I recommend we finalize the documentation and prepare for execution.
[R5.2] Treasury Funding Manager (speak, public): I agree that we have a consensus on the $600M Tier 2 issuance in May 2026. To ensure a successful execution, let's confirm that our investor relations team is aligned with the proposed coupon pricing and hedging approach, and that we've considered all stakeholder expectations.
[R5.3] Finance & Investor Relations Partner (speak, public): I agree that we have a consensus on the $600M Tier 2 issuance in May 2026. To ensure a successful execution, let's confirm that our investor relations team is aligned with the proposed coupon pricing and hedging approach, and that we've considered all stakeholder expectations, including the implications on our NII sensitivity and interest expense budget.

--- Round 6 ---
[R6.1] Regulatory Capital Manager (speak, public): I believe we have reached a consensus on the $600M Tier 2 issuance in May 2026. To finalize, let's confirm that our investor relations team is aligned with the proposed coupon pricing and hedging approach, and that we've considered all stakeholder expectations. I recommend we proceed with finalizing the documentation and preparing for execution.
[R6.2] Treasury Funding Manager (speak, public): I believe we have reached a consensus on the $600M Tier 2 issuance in May 2026. Let's finalize the documentation and prepare for execution, ensuring that our investor relations team is aligned with the proposed coupon pricing and hedging approach.
[R6.3] Finance & Investor Relations Partner (speak, public): I believe we have reached a consensus on the $600M Tier 2 issuance in May 2026. Let's finalize the documentation and prepare for execution, ensuring that our investor relations team is aligned with the proposed coupon pricing and hedging approach. We should also confirm that the final terms are within our interest expense budget and align with our overall financial planning and stakeholder expectations.

--- Round 7 ---
[R7.1] Regulatory Capital Manager (speak, public): I believe we have a clear consensus on the $600M Tier 2 issuance in May 2026. Let's finalize the documentation and prepare for execution, ensuring alignment with our overall financial planning and stakeholder expectations. I recommend we proceed with the planned issuance, confirming that the final terms are within our interest expense budget and that we've considered all stakeholder expectations.
[R7.2] Treasury Funding Manager (leave, public): 
[R7.3] Finance & Investor Relations Partner (leave, public): 

--- Round 8 ---
[R8.1] Regulatory Capital Manager (leave, public): 
[R8.2] Treasury Funding Manager (leave, public): 
[R8.3] Finance & Investor Relations Partner (leave, public): 

--- Round 9 ---
[R9.1] Regulatory Capital Manager (leave, public): 
[R9.2] Treasury Funding Manager (leave, public): 
[R9.3] Finance & Investor Relations Partner (leave, public): 

--- Round 10 ---
[R10.1] Regulatory Capital Manager (leave, public): 
[R10.2] Treasury Funding Manager (leave, public): 
[R10.3] Finance & Investor Relations Partner (leave, public): 

--- Round 11 ---
[R11.1] Regulatory Capital Manager (leave, public): 
[R11.2] Treasury Funding Manager (leave, public): 
[R11.3] Finance & Investor Relations Partner (leave, public): 

--- Round 12 ---
[R12.1] Regulatory Capital Manager (leave, public): 
[R12.2] Treasury Funding Manager (leave, public): 
[R12.3] Finance & Investor Relations Partner (leave, public): 

--- Round 13 ---
[R13.1] Regulatory Capital Manager (leave, public): 
[R13.2] Treasury Funding Manager (leave, public): 
[R13.3] Finance & Investor Relations Partner (leave, public): 

--- Round 14 ---
[R14.1] Regulatory Capital Manager (leave, public): 
[R14.2] Treasury Funding Manager (leave, public): 
[R14.3] Finance & Investor Relations Partner (leave, public): 

--- Round 15 ---
[R15.1] Regulatory Capital Manager (leave, public): 
[R15.2] Treasury Funding Manager (leave, public): 
[R15.3] Finance & Investor Relations Partner (leave, public): 

--- Round 16 ---
[R16.1] Regulatory Capital Manager (leave, public): 
[R16.2] Treasury Funding Manager (leave, public): 
[R16.3] Finance & Investor Relations Partner (leave, public): 

--- Round 17 ---
[R17.1] Regulatory Capital Manager (leave, public): 
[R17.2] Treasury Funding Manager (leave, public): 
[R17.3] Finance & Investor Relations Partner (leave, public): 

--- Round 18 ---
[R18.1] Regulatory Capital Manager (leave, public): 
[R18.2] Treasury Funding Manager (leave, public): 
[R18.3] Finance & Investor Relations Partner (leave, public): 

--- Round 19 ---
[R19.1] Regulatory Capital Manager (leave, public): 
[R19.2] Treasury Funding Manager (leave, public): 
[R19.3] Finance & Investor Relations Partner (leave, public): 

