Additional Tier 1

Banking.

(AT1).

Additional Tier 1 capital.

AT1 is the second highest quality form of regulatory capital under Basel III and CRD IV.

It is intermediate in quality between Core Equity Tier 1 (CET1, the highest quality) and Tier 2 (T2, the lowest quality).

The required features for AT1 are designed to ensure that AT1 instruments are loss-absorbing on a going-concern basis.

• AT1 issuers have full discretion to cancel coupon payments at all times.

• AT1 instruments may be written down or converted into CET1 instruments at a pre-agreed conversion rate.

• Write-down or conversion happens automatically when a pre-specified CET1 capital ratio is reached.

• Write-down may be permanent or temporary, in full or partial.

• Conversion may also be full or partial.

See also

• Bank supervision
• Basel II
• Basel III
• Capital adequacy
• Capital Requirements Directive
• CET1 ratio
• Contingent convertible capital
• Common Equity Tier 1
• Convertible bonds
• Common equity
• CRD IV
• Equity
• Going concern
• Ordinary shares
• Own funds
• Principal write down
• Subordination
• Tier 1
• Tier 2