Yes Bank Additional Tier 1 bondholders seek interest payment

MUMBAI: Retail bondholders of YES Bank have asked Axis Trustee Services, the debenture trustee, to secure payment of overdue coupons (interest payments) on the bank’s Additional Tier 1 (AT1) bonds, restore their holdings in demat accounts and seek regulatory intervention, days after Supreme Court dismissed appeals against Bombay high court’s ruling that quashed the March 2020 write-off.The YES Bank AT1 Retail Bond Holders Association cited Companies Act and Sebi obligations in seeking an explanation for non-payment of the 9% bond coupon due Oct 18, three days after the Oct 15 court order restoring the bonds. It also demanded payment of coupons skipped in 2020-25 and arrangements for the forthcoming Dec 23 coupon on 9.5% bonds.According to analysts, revisiting past coupons raises legal and accounting issues. The write-off was recognised in profit and loss, so restoring the bonds could affect past profits. Coupon payments on high-risk AT1 bonds are also contingent on the bank’s financial performance.The association asked Axis Trustee to disclose YES Bank’s position on each missed coupon, cancellation notices and correspondence since March 2020, including any reliance on contractual discretion or record dates. It also sought coordination with the bank, registrars NSDL and CDSL in order to restore demat holdings.Citing the apex court’s observations that AT1 bonds are high-risk instruments meant for institutional investors, despite YES Bank selling them to individuals, the association sought intervention by RBI and markets regulator Sebi.