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David Everson, Head of Trading, Fixed Income EMEA, Liquidnet, said: “AT1 bonds continue to be in vogue despite the Credit Suisse crisis. We are seeing significant levels of activity in the market – these bonds are proving cheap to trade and with wide spreads, an attractive proposition in a tough market. Counterintuitively, despite Credit Suisse’s AT1 default, the high levels of attention on this previously obscure category of bond have helped to fuel activity from traders seeking interesting new opportunities.
“The sense of opportunity has also been bolstered by the growing realisation that not all AT1s are the same, as the laws that famously triggered Credit Suisse’s default do not apply in other jurisdictions – mitigating the risk of potentially sharp losses. We can expect to see continued interest in AT1s, as trading conditions remain favourable and investors hunt for yield.”
