Explainer

Explainer: What are AT1 bonds and are they in trouble?

AIB raised €625 million in additional tier one bonds this week as the notes’ future is being discussed on the global stage

AT1s were the subject of some controversy as Credit Suisse bonds worth €16.4 billion became worthless. Picture: Getty

On Tuesday, AIB announced it had raised €625 million from the market through the issuance of additional tier one (AT1s) bonds, just days after reports that Basel Committee on Banking Supervision, the global banking regulator, had held a high level meeting to discuss the future of this debt type.

AIB’s fundraise was not unusual - AT1 bonds are used by most European banks to meet their capital requirements, with the market valued at $260 billion ...