AT1

Question 1

What are AT1 instruments?

Answer 1

Hybrid Instruments

Normally debt instruments but once the CET1 ratio drops below a certain percentage they convert to equity and absorb losses the same as CET1

Question 2

What are AT1 instruments also known as?

Answer 2

CoCo bonds

Question 3

What happens if AT1 instruments are down-streamed to subsidiaries?

Answer 3

There is a significant holdings deductions at the entity level (not at Group)

e.g. If BBPLC has down-streamed AT1 to the US IHC, BBPLC can no longer use it.

Therefore it does not count towards it’s own AT1