perpetual bonds

What to do if your MF holds perpetual bonds?

Perpetual bonds have caused some sleepless nights for fund managers after SEBI’s circular earlier this month. On March 10th, SEBI issued a circular capping the debt scheme exposure to perpetual bonds at 10% and also laying down new rules how these bonds should be valued in debt scheme portfolios. We wrote a short take on it last week suggesting that you wait for clarity. SEBI has now come up with one more circular offering some clarification.

What they didn’t tell you about perpetual bonds (AT1 bonds)

RBI’s rescue package for Yes Bank, which will see SBI infusing capital into the bank to pick up 49 % of its equity, offers a breather to its depositors and shareholders. But one class of stakeholders who are set to take a comprehensive haircut valued at Rs 10,800 crore despite the bailout, are the holders of Additional Tier 1 (AT1) bonds in the bank.

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