Challenger bank growth continues as Hampshire Trust Bank issues inaugural Additional Tier 1 bond

The A&O Shearman team was led by partner Tom Grant, alongside senior associates Jacob Sewell and Laura McDonald, and trainee Toby Clyde. A&O Shearman has an established relationship with HTB, having previously advised the bank on prior issuances of regulatory capital securities, including a GBP55 million Tier 2 issuance in October 2025.

A&O Shearman partner Tom Grant commented: “A first listed AT1 is a significant step for any bank, and we were delighted to advise HTB on this sophisticated capital markets product. More broadly, challenger banks are turning to the debt capital markets at pace as their capital needs evolve, and our practice has built deep expertise advising on exactly these transactions.”

The transaction is also part of a wider trend that A&O Shearman has observed over the past 18 months, as challenger banks increasingly turn to the debt capital markets to fund their expansion. As these institutions continue to grow and capture a greater share of the U.K. banking market, their capital requirements have expanded accordingly, resulting in a notable uptick in both AT1 and Tier 2 issuances from across the sector. A&O Shearman's Debt Capital Markets practice has been at the forefront of advising on these transactions, acting for both issuers and managers.

A&O Shearman's recent work in this space includes:

• Close Brothers GBP250m Tier 2 issuance (February 2025), acting for the managers. The deal was led by A&O Shearman partner, Daniel Fletcher.
• Zopa Group Limited GBP80m AT1 issuance (May 2025), acting for the issuer. The deal was led by A&O Shearman partner, Tom Grant.
• OSB Group PLC GBP150m AT1 issuance (November 2025), acting for the managers. The deal was led by A&O Shearman partner, Tom Grant.
• Atom Holdco Limited GBP50m AT1 issuance (November 2025), acting for the issuer. The deal was led by A&O Shearman partner, Tom Grant.
• Hampshire Trust Bank plc GBP55m Tier 2 issuance (October 2025), acting for the issuer. The deal was led by A&O Shearman partner, Tom Grant.
• Aldermore Group PLC GBP300m Tier 2 issuance (October 2025), acting for the managers. The deal was led by A&O Shearman partner, Daniel Fletcher.

This body of work underscores A&O Shearman's depth of experience across the Financial Institutions sector, advising both established and emerging banks as they navigate the complexities of regulatory capital transactions.