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Financial Times — Companies — AT1 Bonds — Uk Banks — European Banks — Contingent Convertible Bonds

Credit Suisse sale ‘forever impairs’ ability of banks to issue AT1s, investors warn

Investors warn that some banks will struggle to issue risky AT1 bonds or pay a higher price for them as Credit Suisse's AT1 bonds were written down, calling into question the future viability of the $260bn segment of debt markets.

1 min read
  • Credit Suisse’s $17bn worth of additional tier 1 (AT1) bonds were written down ahead of its purchase by UBS, impeding banks’ ability to issue AT1s.
  • Greg Peters of PGIM Fixed Income said the fallout from the decision “forever impairs the ability to issue AT1s”.
  • If banks are effectively locked out of the market for AT1 bonds, they could be forced to rely more heavily on other sources of capital, such as equity.
  • The decision has prompted concerns over the future viability of the $260bn segment of debt markets.
  • More than $37bn worth of AT1 debt issued globally has call dates in April alone.
Credit Suisse sale ‘forever impairs’ ability of banks to issue AT1s, investors warn
Additional tier 1 bond market faces ‘risk premium repricing’ in wake of Swiss bank’s debt being written down ahead of equity
Financial TimesNikou Asgari

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