AT1 Bonds (Additional Tier 1) Singapore: The Bank Bonds That Can Go to Zero

Additional Tier 1 (AT1) bonds are perpetual, high-yield bank capital instruments that can be converted into equity or written down entirely if the issuing bank’s capital ratio falls below a pre-set trigger, and are offered in Singapore’s wholesale market to institutional and accredited investors only.

Not financial advice. All figures for educational reference only. Data as at August 2026. Last updated: August 2026.

Key Takeaways

• AT1 bonds are part of the “contingent convertible” or CoCo bond family — contingent because conversion or write-down only happens if a specific trigger event occurs, and convertible because that trigger can convert the bond into bank equity or wipe it out entirely.
• AT1 bonds are perpetual, meaning there is no fixed maturity date returning your principal — investors are instead paid periodic coupons and rely on the bank’s discretion to “call” (redeem) the bond at set future dates.
• In Singapore, AT1 bonds are offered exclusively in the wholesale market: to institutional investors, accredited investors, or in minimum transaction sizes of at least S$200,000 — no prospectus has been registered with MAS for retail sale.
• The 2023 collapse of Credit Suisse saw approximately US$17 billion of its AT1 bonds written down to zero as part of its rescue merger with UBS, while equity shareholders retained some value — an outcome that reversed the usual seniority order and shook the global AT1 market.
• DBS, OCBC and UOB have all issued AT1 instruments in the Singapore dollar market; MAS issued a public statement in 2023 clarifying the loss-absorption mechanics of Singapore banks’ AT1 instruments following the Credit Suisse episode.

What Is AT1 Bonds (Additional Tier 1) Singapore?

Additional Tier 1 (AT1) bonds are a category of bank capital securities created under the post-2008 Basel III global banking reforms, designed to let banks absorb losses and rebuild capital during a crisis without immediately requiring a government bailout. They sit within a family of instruments often nicknamed “CoCo bonds” (contingent convertibles): “contingent” because a conversion or write-down only occurs if the issuing bank’s capital strength falls below a specific, pre-defined trigger level, and “convertible” because that trigger can force the bond to convert into the bank’s ordinary shares, or be written down in value, partially or entirely.

Unlike a normal corporate or government bond, AT1 bonds are perpetual — they have no fixed maturity date on which your principal is automatically returned. Instead, investors receive periodic coupon payments (typically higher than the bank’s senior or subordinated debt, compensating for the added risk), and the bank retains discretion over whether to “call” (redeem) the bond at specific future call dates, which it may or may not choose to exercise.

How Does AT1 Bonds (Additional Tier 1) Singapore Work in Singapore?

In Singapore, AT1 bonds are issued and traded exclusively in the wholesale market. This means they are available only to institutional investors, to accredited investors (broadly, individuals with net personal assets exceeding S$2 million, net financial assets exceeding S$1 million, or income of at least S$300,000 in the preceding 12 months, who have opted in to accredited investor status with the relevant financial institution under the Securities and Futures Act), or in minimum transaction denominations of at least S$200,000. No prospectus for offering AT1 bonds to Singapore retail investors has been registered with MAS, meaning ordinary retail investors cannot access these instruments directly — a deliberate regulatory guardrail given their complexity and loss-absorption risk.

Local banks DBS, OCBC and UOB have all issued Singapore-dollar AT1 instruments as part of their regulatory capital structure. Following the March 2023 collapse of Credit Suisse in Switzerland — whose AT1 bonds were written down to zero as part of its emergency merger with UBS — the Monetary Authority of Singapore issued a public statement clarifying that Singapore banks’ AT1 and Tier 2 capital instruments follow a conventional order of priority, where equity holders would generally absorb losses before AT1 holders, addressing market concerns about how a similar scenario might play out for Singapore-issued instruments.

AT1 Bonds (Additional Tier 1) Singapore Example

In March 2023, Swiss regulators orchestrated an emergency takeover of Credit Suisse by UBS. As part of the deal, approximately US$17 billion worth of Credit Suisse’s AT1 bonds were written down to zero, wiping out AT1 bondholders entirely — while Credit Suisse’s ordinary shareholders, who normally rank below bondholders in a conventional liquidation, still received some value in UBS shares under the merger terms. This reversed the usual seniority expectation (bonds senior to equity) and became one of the largest AT1 write-downs in the instrument’s history, prompting the European Central Bank, Bank of England, and MAS to each issue statements clarifying that their own domestic banks’ capital structures would generally respect the conventional order, where equity absorbs losses before AT1 bonds.

Advantages of AT1 Bonds (Additional Tier 1) Singapore

Higher yield than senior bank debt. AT1 bonds compensate investors for their subordinated, loss-absorbing, perpetual structure with meaningfully higher coupons than a bank’s senior or Tier 2 subordinated debt.

Helps diversify a fixed income allocation. For institutional and accredited investors already holding government bonds and investment-grade corporate debt, AT1s offer a distinct risk-return profile tied specifically to bank capital strength.

Regular coupon income while held. Provided the issuing bank remains above its capital triggers and continues paying (coupon payments on AT1 bonds are also typically discretionary and can be cancelled by the bank without triggering a default), investors receive periodic income.

MAS oversight of local bank capital adequacy. Singapore banks are subject to MAS’s capital adequacy framework, meaning DBS, OCBC and UOB’s AT1 issuances sit within one of the world’s more conservatively regulated banking systems.

Risks and Limitations

Total loss is possible, as Credit Suisse showed. If the issuing bank’s capital ratio breaches its trigger, AT1 bonds can be written down partially or entirely to zero — and, as 2023 demonstrated, this can happen even while equity holders retain some value, upending normal seniority expectations.

No fixed maturity date. Because AT1 bonds are perpetual, investors depend on the bank choosing to call the bond at a future call date; if the bank skips a call (which has happened with various global AT1 issuers), the investor’s capital can remain locked up indefinitely.

Coupons can be cancelled at the bank’s discretion. Unlike a standard bond’s fixed contractual coupon, AT1 coupon payments are typically discretionary and can be skipped by the issuing bank without constituting a default under the instrument’s terms.

Not accessible or suitable for retail investors. Given the complexity and loss-absorption risk, AT1 bonds are restricted to Singapore’s wholesale market and are not an appropriate holding for retail investors seeking straightforward fixed income exposure — those investors are better served by instruments like Singapore Savings Bonds or T-bills.

AT1 Bonds vs Singapore Savings Bonds (SSB)

Source: MAS statement on Additional Tier 1 Instruments (2023); MAS Singapore Savings Bonds FAQs, 2026.

The Bottom Line

For Singapore investors, AT1 bonds are a wholesale-market instrument reserved for institutional and accredited investors comfortable with the real possibility of a total capital write-down — retail investors seeking safe, government-backed fixed income are far better served by Singapore Savings Bonds or Treasury bills.

Frequently Asked Questions

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