Just a day after Bendigo and Adelaide Bank launched an issue of convertible preference shares, Suncorp Group has followed suit. Suncorp is looking to raise A$350 million of new tier-one capital and will pay a margin of 465 to 485 basis points over the three-month bank bill swap rate.Bendigo and Adelaide said it would pay a dividend rate of between 500 and 550 basis points over the swap rate.Suncorp's preference shares are fully paid, unsecured, non-cumulative and convertible. The securities, CPS2, are perpetual and have no fixed maturity date.CPS2 will need shareholder approval to qualify as residual tier-one capital under current Australian Prudential Regulation Authority prudential standards and as additional tier-one capital under Basel III.Suncorp's constitution does not allow for the issue of preference shares with some of the proposed non-viability features in CPS2. The company will put a special resolution at its annual general meeting.If it does not get shareholder approval, CPS2 will not be Basel III compliant.Under the non-viability trigger, if APRA determines that there is a serious impairment to Suncorp's financial position or solvency the CPS2 shares will convert to ordinary shares at a fraction of their face value.There is an optional exchange date, in December 2017, and a mandatory conversion date, in December 2019. At the exchange date, Suncorp has the option of converting the CPS2 to ordinary shares or redeeming them for cash. The dividend will be paid at Suncorp's discretion. However, if Suncorp misses a payment date it will not be allowed to pay a dividend or distribution on the ordinary shares.