Yes bank AT1 bond verdict by High court is a déjà vu of the Franklin episode for me.
No one gave the credit of predicting Franklin crises before it happened but criticised me for supporting franklin to stop redemptions (again correct in the hindsight now) (1/4)
No one gave the credit of predicting Franklin crises before it happened but criticised me for supporting franklin to stop redemptions (again correct in the hindsight now) (1/4)
AT1 bonds are structured to default if the tier 1 capital falls below 6.125% which happened in Yes bank & hence the bonds have to be marked to zero, period!
If now investors are paid, it’s an injustice against the equity holders (2/4)
If now investors are paid, it’s an injustice against the equity holders (2/4)
Theory of bond being senior vs equity is not applicable in AT1 and Tier 2 bonds, because that’s how they are structured!
You can’t make more yields while investing & then cry foul when it defaults!
But investors want to hear only good things about their investments :) (3/4)
You can’t make more yields while investing & then cry foul when it defaults!
But investors want to hear only good things about their investments :) (3/4)
If you don’t follow the above tweet and you need to know more about the structuring of an AT1 & Tier 2 bond, here’s an old thread - (4/4)
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