Suncorp Group is looking to raise at least A$250 million of Additional Tier 1 capital. Suncorp is selling Additional Tier 1 capital in the form of convertible preference shares, to be known as "CPS3".The funds raised will be used to meet the capital needs of the regulated entities in the group.The raising, which was announced to the ASX yesterday, will be only the second to list on the ASX this year. The first, ANZ's Capital Notes 2, will begin trading on a deferred settlement basis today.With Suncorp Group Limited being the ultimate holding company for one of Australia's largest insurance groups and a regional bank, the structure of this Additional Tier 1 capital issue is slightly different from that of ANZ's Capital Notes 2 and other fully compliant Basel III issues from deposit taking institutions.There is only one trigger for mandatory write-off or conversion of the CPS3 into ordinary equity of Suncorp, this being a Non-viability trigger. Non-viability would be determined by APRA, if it saw fit.There is no common equity capital trigger that would be pulled when the common equity capital ratio falls below a pre-set level. The advantage of this trigger for note holders is that it increases the likelihood of conversion into ordinary equity, rather than simply writing off their investment. However, depending on the degree of stress being experienced by the issuer, it may only be a matter of time before the end result is the same.As with other Additional Tier 1 capital issue coupons are non-cumulative and can be deferred at the discretion of directors or if stipulated by APRA. However, all being well, coupons will be paid at a rate equivalent to the 90 day bank bill rate plus a margin of between 340 to 360 bps, adjusted for franking credits.Suncorp has the option to redeem the CPS3 in June 2020 but if the option is not exercised mandatory conversion into Suncorp ordinary shares will take place in June 2022. In another little twist, Suncorp retains the option to convert the CPS3 into ordinary shares in June 2020 if they are not redeemed and if the 90 day bank bill rate is considered too high to continue paying coupons as specified.   Suncorp issued Additional Tier 1 capital in the form of CPS2 in November 2012, paying a coupon based on the 90 day bank bill rate plus 465 bps. ANZ's Capital Notes 2 will pay the equivalent of 320 bps over the 180 day bank bill rate.The book build for the CPS3 will take place next Monday and the offer will open on Tuesday. The offer is set to close at the end of the month and deferred settlement trading on the ASX will commence on May 9.