TOKYO: Japan’s Sumitomo Mitsui Financial Group (SMFG) (8316.T) sold $1 billion of additional tier-1 (AT1) debt on Wednesday, becoming the first major global bank to sell the risky securities since similar bonds issued by Credit Suisse were wiped out last month.

The deal shows confidence in the banking sector of Asia’s second-largest economy and that risk appetite is returning as the turmoil in financial markets sparked by the collapse of two U.S. regional lenders fades.

AT1 bonds - the riskiest tranche of a bank’s bonds also known as “contingent convertibles” or “CoCo” bonds - can be converted into equity or written off if a bank’s capital level falls below a certain threshold.

The market for AT1s froze after the government-brokered takeover of Credit Suisse by rival UBS (UBSG.S) in March. The Swiss regulator determined that more than $17 billion worth of Credit Suisse’s AT1 bonds will be written down to zero, even as shareholders, who sit below bonds in the priority ladder for repayment in a bankruptcy process, will receive over $3 billion.

The resultant tumult cast doubts on whether SMFG would move ahead with its planned AT1 offer, and led to Japan’s biggest bank, Mitsubishi UFJ Financial Group Inc (8306.T), putting on hold its issuance until at least mid-May.

“SMFG had a choice of not selling them but they went ahead, likely signalling that the Japanese financial system may be more stable than those in other countries,” said Nana Otsuki, senior fellow at Pictet Japan.

SMFG sold the bonds in two tranches, in 89 billion yen ($662.50 million) five-year notes, and 51 billion yen 10-year bonds.

The 89 billion yen issuance carries a coupon rate of 1.879% for the initial five years and two-month period, a regulatory filing showed. That compared with an initial 1.534% coupon on similar bonds issued by the bank in December.

The 51 billion yen one has a coupon of 2.180% for the first 10 years and two months, compared with 1.750% on the 10-year bonds sold in December.

The terms were attractive for investors, some analysts said.

“In Japan, where spreads over corporate bonds are thin, the terms for these AT1 bonds were reasonably good, provided that the banking sector is credible,” said Pictet’s Otsuki.

Japanese banks’ AT1 bonds had been configured in a way the value is secured even if the government is involved in restructuring, and SMFG’s new issues are seen to have the same features, she said.