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Additional Tier-1 (AT1) Bonds

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.