Additional Tier-1 (AT1) Bonds:
The Bombay High Court Friday quashed the write-off of Additional Tier-1 (AT1) bonds worth Rs 8,400 crore issued by Yes Bank Ltd, bringing relief to investors.
- These bonds are unsecured bonds that have perpetual tenors, are issued by banks and have no maturity date.
- They have a call option, which can be used by the banks to buy these bonds back from investors.
- These bonds are typically used by banks to bolster their core or tier-1 capital.
- These AT1 bonds are subordinate to all other debt and only senior to common equity.
- These bonds were introduced by the Basel accord after the global financial crisis to protect depositors.