AT1 Bonds Current Affairs, GK & News

AT1 bonds or additional tier 1 bonds are unsecured bonds which have no maturity rate i.e. they have a perpetual tenure. These bonds are issued by banks to strengthen their tier 1 capital (core capital). They are subordinate to all other types of debts except common equity. They have call option, which the issuer uses to buy it back from the investors. Mutual funds (MF) are among the largest investors in this kind of bonds. The finance ministry asked SEBI to withdraw its recently imposed restrictions on MF investments in AT1 bonds.

What are AT1 bonds?

Department of Financial Services (DFS), under finance ministry, has sent a memorandum to the chairman of Securities and Exchange Board of India (Sebi) and has asked it to withdraw a rule treating AT1 bonds (perpetuals) which is having 100-year maturity. Highlights The circular was issued by SEBI on March 10, 2021 regarding the AT1 bonds ..