Bond investors attack design of new Tier I capital

Traditional bond buyers worry about tail risks in CRD IV-compliant capital instruments, but analysts are predicting up to €200 billion of issuance

A sign reading 'Wrong way - go back'

Bond investors have attacked the template laid out for new regulatory capital instruments in Europe's version of Basel III, arguing potential purchasers will shun so-called additional Tier I (AT1) products when they realise how risky they are. So far, the market has seen only one issuance since the criteria were laid out in the fourth Capital Requirements Directive (CRD IV) – from BBVA in April – but it was heavily oversubscribed, and analysts expect up to €200 billion of this new debt to be

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