Anulowanie wypłaty odsetek wynikających z obligacji AT1 – ramy regulacyjne
Cancellation of interest payments under AT1 bonds – regulatory framework

Summary/Abstract: AT1 bonds are the newest type of hybrid financial instruments which, thanks to specific mechanisms of the issuer’s loss absorption, constitute a surrogate for the bank’s capital. One of these mechanisms is the special feature in the form of the possibility of total cancellation of the payment of interest by the issuer. In the early period of development of the AT1 bond market, the risk of suspension of interest payments based on discretionary rights of the issuer was quite commonly treated as unlikely. However, the risk of suspension of interest payments materialized at the beginning of 2016, when the rumors about the possibility of Deutsche Bank AG being able to use this option led to a significant decline in the valuation of the entire AT1 bond market. There are a number of circumstances that make it possible not to pay interest on AT1 bonds, and the issuer’s autonomous decision in this respect is only one of them. The purpose of this article is to describe these cases in which – due to regulatory restrictions – the issuer of AT1 bonds will not be entitled to interest payments.

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