At1 Bonds

Capital markets regulator Sebi on Monday said that mutual funds will value Additional Tier 1 or AT-1 bonds based on yield to call (YTC) basis. Yield to call is the expected return an investor gets if they buy a bond and hold it until the issuer repurchases it on the call date, before maturity. This came after the National Financial Reporting Authority (NFRA) recommended that AT-1 bonds should be valued based on yield to call to align with market practices and Ind AS 113 principles. This recommendation applies only to the valuation of AT-1 bonds under Ind AS 113, not to other purposes. "In order to align the valuation methodology with the recommendation of NFRA, it has been decided that the valuation of AT-1 bonds by mutual funds shall be based on Yield to Call," Sebi said in a circular. However, for all other purposes, the deemed maturity of perpetual bonds will still follow the guidelines in the Master Circular. AT1 bonds are issued by banks with no maturity date, but they includ

Fixes coupon at 8.34%, 24 bps higher than previous offering

Mutual funds stays away after Sebi valuation norm change

Sebi on Tuesday sent a notice to Yes Bank's former MD and CEO Rana Kapoor asking him to pay Rs 2.22 crore in a case of misselling the lender's AT-1 bonds and warned of arrest if he fails to make the payment within 15 days. The regulator also warned that his assets and bank accounts would be attached in case the payment is not made within the stipulated time. The case relates to misselling of the bank's AT-1 (Additional Tier-1) bonds to retail investors by the bank's officials. It was alleged that the bank and certain officials did not inform investors about the risk involved while selling the AT-1 bonds in the secondary market. The sale of AT-1 bonds started in 2016 and continued till 2019. The demand notice came after Kapoor failed to pay the fine imposed on him by the Securities and Exchange Board of India (Sebi) in September 2022. In a notice issued on Tuesday, Sebi directed Kapoor to pay Rs 2.22 crore, which includes interest and recovery cost, within 15 days. In the event

There is no pressure for lenders to raise capital at any price. Its capital adequacy is comfortable, and it can wait for better pricing in the coming months

Offering slated for coming week; bank to decide on actual issuance based on yield level in the market, which hardened in the last two weeks

AT1 bonds have a cushion on both sides. They are affected only after either equity or debt has been impacted

Law firm Pallas Partners, which filed the suit in a Swiss court on April 18, said the Finma agency had no right to order the writedown and is seeking full compensation for its clients

The move, described by people briefed on the decision, erases so-called contingent capital awards that had been worth 360 million Swiss francs ($403 million) at the end of 2022

The Swiss administrative court has received four filings linked to the additional-tier 1 debt writedown, a spokesperson said on Thursday declining to give any detail

Bank's board of directors has given it the go-ahead to raise up to Rs 6,500 crore in FY24

A Bloomberg index of contingent convertible bonds has risen 10 per cent from the lows seen during the Credit Suisse crisis

The issuance of tier II as well as Tier I bonds was marked by increase in the coupon on instruments reflecting hardening of interest rates and tight liquidity

It would raise capital by issuing AT-1 bonds upto Rs 7,000 crore and tier- II Bonds up to Rs 5,000 crore, in one or more tranches

If top court rules in favour of bondholders, Yes Bank shares could see a selloff as its capital base gets eroded, impeding its growth prospects; other banks, especially PSBs, may be impacted too

Hardening yields drives decision to raise lower amounts; Bond market sources said coupon was firmed up at 8.75%

Deutsche Bank's AT1 bonds have tumbled in value after Switzerland wiped out Credit Suisse's securities in the deal for it to be taken over by UBS

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During FY23, HDFC Bank was the only private sector lender that raised capital using AT1 bonds

Big money managers such as Pacific Investment Management Co. and Invesco Ltd. are among the largest holders, owning around $807 million and $370 million, respectively