Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 30, 2023 erstellt
Description:
Additional Tier 1 (AT1) notes are perpetual, callable notes issued by banks to help meet their capital requirements. Banks almost always choose to call the notes at the first call date, even when issuing new notes is more expensive than keeping the old notes in place. We argue from a simple model that this behavior can be explained from a desire to keep expected maturity of future AT1 issues low. Our empirical analysis confirms that after covid the decision to call lowers the yield on other AT1 issues from the same bank. Calls do not affect other classes of subordinated capital or bail-in debt, indicating that calls are not perceived as a signal of financial strength