Strong demand fosters growth and diversity in AT1

This time last year, there was still some doubt as to whether there would be enough demand from investors in Europe to absorb the volume of additional tier one capital (AT1) banks were expected to issue. There was uncertainty about whether the mandates of real money investors would be flexible enough to allow them to buy instruments with conversion or write-down features. There were also question marks over their capacity to buy speculative grade issues. These uncertainties have been decisively dispelled over the last year, with huge investor demand for AT1 allowing for rising volumes of issuance from European banks in euros and sterling as well as dollars. A group of investors and issuers gathered at this year’s Morgan Stanley Bank Capital Investors’ Roundtable to discuss the recent growth of the market and the challenges and opportunities that lie ahead for investors.