📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!
  • google app store apple app store
    • ✖

      Question

      Which of the following is an unsecured, perpetual and

      non-convertible bond issued by banks in order to secure an external capital base to be used in times of a financial emergency without being subjected to insolvency and distress measures?
      A Long Term bonds Correct Answer Incorrect Answer
      B AT 1 bonds Correct Answer Incorrect Answer
      C AT 2 bonds Correct Answer Incorrect Answer
      D Investment Grade bonds Correct Answer Incorrect Answer
      E Repo Bonds Correct Answer Incorrect Answer

      Solution

      AT1 Bonds stand for additional tier-1 bonds. These are unsecured bonds that have perpetual tenure. In other words, the bonds have no maturity date. They have a call option, which can be used by the banks to buy these bonds back from investors. These bonds are typically used by banks to bolster their core or tier-1 capital. They carry a higher rate of interest and they are riskier than other debt instruments.

      Practice Next
      More Current Financial Awareness Questions

      Relevant for Exams:

      ask-question