A European Banking Authority (EBA) monitoring report
on additional tier 1 (AT1) instruments could result in
less future-proof language in deals.
The document, published on October 8, had been expected by
the legal community for some time. It has only preliminary
status and the regulator acknowledges that the paper is not
The report, which was also welcomed as providing clarity in
some areas, was based on analysis of the terms and conditions
(T&Cs) of nine AT1s, issued between August 2013 and May
2014. The EBA did not specify which deals were examined beyond
stating that three of the deals were made under a conversion
mechanism and six under a temporary write-down mechanism. An
EBA spokesperson refused to give further details.
The document lists concerns and clarifications with regards
to the interpretation of the CRR and supplementary regulatory
technical standards (RTS) dealing with AT1 instruments.