AT1 Bonds Are So Popular That Spreads Are the Tightest Ever

Demand for the riskiest bank bonds is so strong that the spread investors demand to hold them is the tightest since the securities were created more than a decade ago.

The average risk premium on a Bloomberg index that tracks secondary market prices of AT1s by European lenders — the main issuers of this type of debt — ended Monday at 255.2 basis points.