When things go wrong
AT1 bonds
Also called: Additional Tier 1 · CoCo bonds
Bank bonds designed to absorb losses: they can be converted into shares or written down to zero in a crisis.
Additional Tier 1 (AT1) bonds are a type of bank capital introduced after the 2008 financial crisis. They pay relatively high interest because investors accept a special risk: if the bank gets into serious trouble, the bonds can be converted into shares or written off completely.
Their exact terms are set in each bond's documentation and by the bank's regulator. The rescue of Credit Suisse in 2023 is the best-known case of AT1 bonds being written down.
General explanation for education only, not investment advice. Company-specific definitions can differ; each breakdown uses the company’s own.