AT1 Bonds Stay 75% Less Volatile Than High-Grade Debt as Bond Markets Convulse

2 articles · Updated · Bloomberg · Aug 20

Rolling 10-day data show AT1 bank bonds have been 75% less volatile than high-grade corporate debt, an unusual outcome in the latest bond-market turmoil.
Long-dated government bonds and other mainstream debt have taken the bigger hit as investors grapple with inflation worries, fiscal strains and heavy corporate issuance.
That leaves deeply subordinated AT1 securities—typically seen as among the riskiest and most complex bank debt—behaving as one of the market's steadier pockets.
The divergence underscores how this bond selloff has upended normal risk patterns, with safer benchmark sectors swinging more sharply than niche bank capital instruments.