The Commonwealth Bank of Australia (CBA) is undeterred by the sanctioned $17 billion wipeout of Credit Suiss's CoCo bonds, also known as AT1 bonds, and is looking to raise A$750 million ($509 million), according to a report from «Reuters» on Tuesday.

Such securities are popular in Australia among retail investors pursuing higher yields, and the situation down under is different compared to Credit Suisse according to BondAdvisor portfolio manager Nick Chaplin, who told Reuters the difference between the two is like «chalk and cheese.»

Well Capitalized Banks

In the CBA issue, conversion to equity is baked into the instrument which the Australian financial regulator oversees. «Australia has some of the most conservative capital rules in the world, and these securities are from one of the most capitalized banks in the world, according to Chaplain.

Still, it is worth bearing in mind that at the time of its demise, Credit Suisse was also well capitalized but was hit by what observers have come to call a classic bank run as clients pulled tens of billions out of it. Moreover, systemically important banks in Switzerland have capital requirements that are more rigorous than those that are not. 

Japanese Banks

CBA isn't the first bank to issue post-Credit Suisse AT1 bonds, although it is the first one in Australia to do so. That distinction belongs to Japan's Sumitomo Mitsui Financial Group (SMFG), one of around thirty systemically important banks globally. It tapped the market for the instruments in April, as finews.com reported, selling 140 billion yen of AT1 debt ($1 billion).