What Are AT1 Bonds, and Why Are They Risky?

1 min read The Wall Street Journal 24 Mar 2023, 07:06 PM IST

Credit Suisse is just one issuer of AT1 bonds in recent years

AT-1 bonds worth Rs37,600 crore may be prematurely recalled by banks, including those under PCA and those likely to fall under that framework, rating agency Icra said. Photo: iStockphoto

Swiss regulators announced on March 19 a wipeout of more than $17 billion of Credit Suisse Group AG’s additional Tier 1 bonds, or AT1s, shocking investors as shareholders were paid out before some bondholders. AT1 bonds deliver higher yields than many comparable assets, which makes them attractive to investors willing to take the risk.