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AT1 bonds or additional tier 1 bonds are perpetual bonds as these do not have any maturity date. These are allowed as part of the Tier I capital for Banks under Basel III guidelines to the extent of 1.5% These bonds are riskier than other normal bonds because of the following features: · The issuing bank has the discretion to skip coupon payment. Under normal circumstances it can pay from profits or revenue reserves; however in case losses for the period, the coupon payment can be skipped. · The bank has to maintain a common equity tier I ratio of 5.5%, failing which the bonds can get written down or converted into equity.