AT1 bondholders have little room for recourse if enterprise fails: lawyers
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INVESTORS holding on to Additional Tier-1 (AT1) bonds could face difficulty getting their money back if there are clauses in a bond’s contracts that allow the bondholders’ priority to be revoked in the event of a restructuring.
“If the bond instrument says there are some capital requirements or clauses which reverse the order, bondholders would be pushed downwards,” explained a lawyer.
Seeking recourse could be difficult if the clauses were there when investors signed on the dotted line, he added.
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