Credit Suisse is expected to wind-down its covered bond programme amid a reorganisation of the Swiss banking group prompted by regulatory developments, while National Australia Bank has launched a consent solicitation aimed at converting early issuance from hard to soft bullets.

In response to Switzerland’s “too big to fail” regulations, the Swiss group is creating a domestic subsidiary (CS Schweiz) that will be responsible for, among other things, the residential mortgage business related to its covered bond programme. CS Schweiz will assume a contractual joint and several liability for all contractual obligations of Credit Suisse AG – the issuer of the covered bonds – at the time of the asset and liability transfer, which is expected by year-end.

Credit Suisse therefore yesterday (Monday) launched a consent solicitation seeking approval to change the definition of an “issuer event of default” (IEoD), which, according to Fitch, mainly involves deleting as an IEoD the case that the issuer ceases or threatens to cease to carry on all or a material part of its business or operations, and also an IEoD not occurring as long as all assets of the issuer are transferred to, and all its debts and liabilities are assumed by, a continuing entity.

Credit Suisse is offering holders of all of its covered bonds a consent fee of 5 cents in the consent solicitation – it is offering senior unsecured bondholders a 10 cent fee in the same exercise. The deadline is 12 September, with meetings on 14 September.

Fitch and Moody’s said that they do not expect any rating actions to result from the changes. The covered bonds are rated Aaa/AAA.

Credit Suisse’s last benchmark covered bond was a Eu1.25bn seven year in September 2014.

Fitch said it understands from Credit Suisse that it intends to cease issuing any covered bonds under the programme as newly-issued covered bonds could not benefit from the joint and several liability arrangement, and the rating agency therefore considers the programme to be in wind-down.

“The agency recognises the programme’s importance to the issuer,” it added, “with many investors also key investors in Credit Suisse’s other debt instruments.”

Michael Spies, covered bond and SSA strategist at Citi, said that this consideration means he does not expect the ratings to be withdrawn. He also said that although the issuer has not ruled out setting up a new covered bond structure in the longer term, it should not be expected in the foreseeable future.

Credit Suisse’s move echoes that of UBS, whose programme was also deemed to be in wind-down after a similar reorganisation. However, although international issuance from the two big banks’ structured covered bond programmes has come to an end, domestic covered bond issuance continues via Switzerland’s two specialist joint issuers, Pfandbriefzentrale der schweizerischen and Pfandbriefbank schweizerischer Hypothekarinstitute, who issue according to Swiss legislation.

National Australia Bank meanwhile launched a consent solicitation to convert four covered bonds in euros, Norwegian kroner and sterling from hard to soft bullet structures. The bonds are those issued early in the Australian bank’s programme, while more recent issuance has been in soft bullet format – some 144A US dollar hard bullets have been omitted from the consent solicitation, as has been the case in some others.

A fee of 5 cents is on offer. The deadline is 9 September and meetings are scheduled for 14 September.

Unlike most recent consent solicitations, neither the Credit Suisse nor the NAB exercises have early participation fees available. This is understood to be driven by the desire to allow investors who only vote at the start of September to benefit from the fee payable to those voting in favour.