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What is Additional  Tier - 1 bonds? All you need to know 

The move to write-off dollar 17.5 billion in Additional Tier-1 (AT-1) bonds issued by Credit Suisse to a zero-value has caused jitters among market participants globally.

The Swiss government and FINMA arranged an all-stock agreement on March 19 for UBS Group AG to acquire Credit Suisse for USD 3.2 billion.

Following this incident, the government and authorities have begun working to avoid a recurrence, banks are assuring clients of their financial stability.

Investors are also evaluating whether their AT-1 bonds with other banks might find themselves in the same situation.


Banks issue AT-1 bonds, a type of unsecured perpetual bond, to increase their core capital base and comply with Basel III norms. 

These standards, which called for keeping stronger balance sheets, were developed in the wake of a number of banks failing during the global financial crisis of 2008–2009.

Under Basel III norms, banks must keep capital at a minimum ratio of 11.5% of their risk-weighted loans.

Click here to learn more about AT-1 bonds.

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What is Additional Tier-1 bonds? All you need to know

In case of crisis or difficulty, a bank can take the liberty to convert them into equities or write-off like the recent case of Credit Suisse episode and Yes Bank incident from 2020.

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What is Additional Tier-1 bonds? All you need to know

In case of crisis or difficulty, a bank can take the liberty to convert them into equities or write-off like the recent case of Credit Suisse episode and Yes Bank incident from 2020.

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