The Bombay High Court Friday quashed the write-off of Additional Tier-1 (AT1) bonds issued by Yes Bank Ltd.

• AT1 bonds, short for Additional Tier 1 bonds, are a class of bonds issued by banks.
• These bonds are typically used by banks to bolster their core or tier-1 capital to meet Basel III norms.
• AT1 bonds are subordinate to all other debt and except common equity.
• They offer higher returns but also carry a higher risk.
• Tenor – AT1 bonds are unsecured bonds that have perpetual tenor.
• These bonds have no maturity date but have a call option by which the banks buy these bonds back from investors.
• Risks – AT1 bonds, like other bonds, pay regular interest.
• If the bank issuing is making losses or at risk of falling short of capital need, it has the discretion to either reduce or completely skip their interest pay out.
• When a bank becomes non-viable, AT-1 bonds are either converted into equity or written off based on the direction of the RBI.