A good glide path

AT1 bonds may lose sheen but Sebi takes the right call

The Securities and Exchange Board of India (Sebi) has taken a pragmatic decision to implement its proposed valuation method for perpetual bonds, or additional tier-1 (AT1) bonds in a phased manner. This comes after a request for review from the finance ministry and frantic lobbying from debt-mutual funds, which stood to lose heavily. The Sebi now proposes to reset valuation in three phases. Until March 31, 2022, residual AT1 maturity may be calculated at 10 years from the date of issue. Over the first half of 2022-23, residual maturity will be reset to 20 years and it will be extended