Investors in high-risk bonds face rule changes, uncertain payments. Banks typically sold perpetual AT1 bonds with a five-year repayment option. Previously, investors received repayment and banks issued new bonds. However, the trend is shifting. The situation exposes global finance’s vulnerability to rising borrowing costs and the Ukrainian conflict. Credit Suisse’s near-collapse resulted in a government-backed rescue, erasing billions in AT1 bonds, surprising investors, and raising costs for other banks.
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