HONG KONG (Reuters) – Hong Kong’s quasi-central bank on Wednesday said investors of additional tier 1 one (AT1) bond should follow equities shareholders in absorbing losses, as market were roiled in the wake of a write off of $17 billion worth of Credit Suisse bonds.
Shareholders of financial institutions “are the first ones to absorb losses, followed by holders of AT1 instruments” on a winding up of the institution, Hong Kong Monetary Authority said in a statement.
Holders of capital instruments, including core equity capital, AT1 capital and Tier 2 capital, issued by a financial institution should expect to be treated in accordance with the priority set out in Hong Kong’s Financial Institutions (Resolution) Ordinance, the central bank said.
(Reporting by Selena Li; Editing by Toby Chopra)
