Banks Leverage High AT1 Bond Demand to Secure Favorable Redemption Terms

Reported 30 days ago

High demand for Additional Tier 1 (AT1) bonds is empowering banks to introduce more favorable redemption clauses, notably clean-up call options, which allow them flexibility in managing their debt. This year, over 40% of European AT1 bonds feature such clauses, marking a significant shift from previous market practices. As demand continues to surpass supply, with recent offerings seeing multiple times oversubscribed orders, banks are capitalizing on this trend to enhance their control over capital management, despite adding complexity and uncertainty for investors.

Source: YAHOO

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