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Yes Bank Won't Pay AT-1 Coupons Despite SC Ruling
23 Oct
Summary
- Yes Bank may not pay AT-1 bond coupons due this year.
- Supreme Court overturned the 2020 write-off of AT-1 bonds.
- Bank's capital ratio could decrease by approximately 250 basis points.
Yes Bank is unlikely to disburse coupon payments for its Additional Tier-1 (AT-1) bonds this year, even after the Supreme Court overturned their write-off from 2020. The bank is preparing to file a review petition against the apex court's ruling.
Bondholders are actively seeking clarity and payment for coupons that have been outstanding since the bank initially wrote off these AT-1 bonds. These investors have formally requested intervention from the debenture trustee.
The Supreme Court had previously dismissed appeals from Yes Bank, the RBI, and the Union government, upholding a High Court judgment that nullified the write-down of AT-1 bonds worth ₹8,415 crore. This write-off was part of the bank's 2020 reconstruction plan.
Yes Bank has indicated that its Common Equity Tier 1 (CET1) capital ratio might decrease by approximately 250 basis points due to this development. However, the bank stated its overall Tier 1 capital ratio is expected to remain stable.
