PNB did not respond to Reuters' request for comment. AT-1 bonds are hybrid securities that have loss-absorbing features and can be written-down under certain scenarios, including a depletion of capital.
These instruments issued by India's Yes Bank were written down in March 2020 after the central bank initiated a restructuring. While the market for these securities has recovered since then, it is mostly restricted to government-owned and high-rated banks. Credit Suisse' decision to write down its AT-1 bonds after its sale to UBS earlier this month had prompted analysts to say that pricing of these securities could once again be impacted. PNB received 42 bids at Friday's auction, ranging from 8.50% to 10.75%, according to bidding details shared by the merchant bankers with Reuters. "Few investors were exploring the impact opportunity after foreign (the) AT-1 bond yield spread widened, but domestic sentiment has not yet turned risk-averse," said Nagesh Chauhan, head of debt capital market at Tipsons Group.
($1 = 82.3030 Indian rupees) (Reporting by Bhakti Tambe and Dharamraj Dhutia; Editing by Sonia Cheema)
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