Additional Tier 1

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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