Capital-seeking public sector banks have increasingly sought issuing additional tier-I (AT1) bonds to raise capital. Ltd, which manages a fund with AT1 bonds, said, “In analysing these bonds, we were already considering the net amount available for payout. Sitaraman said, “Market has taken comfort in some public sector bank bonds, as default is not expected. Risk attached to AT1 bonds has reduced but not dissolved completely. Fall in market yields for these bonds may be limited in the near term, but could pick up in coming months.

Source: Mint February 19, 2017 12:23 UTC