Yes Bank’s Additional Tier-1 (AT1) bonds have returned from the dead, but their investors are still waiting to see their money. Nearly a week ago, the Supreme Court upheld a Bombay High Court ruling that invalidated the bank’s Rs 8,415-crore write-off of these bonds during its 2020 rescue.
AT1 bonds are not supposed to be indestructible like James Bond. Their purpose is precisely to take a hit when a bank is in trouble. But the Yes Bank saga shows that even a bond designed to disappear can return as a legal liability when the rules governing its destruction are not followed.
