BVTV: Getting to the bottom of subordinated debt

By Wolfgang Bauer

Subordinated debt enjoyed an excellent year in 2017, AT1 (Additional Tier 1) bonds in particular. But what are the unique features of this sub-asset class and do AT1 bonds still offer value? M&G credit analyst Mark Robinson, who focuses on the banking sector, joined me this morning to explain the challenges that today’s tight spread levels potentially hold for investors.

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The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.

Wolfgang Bauer

Job Title: Fund Manager

Specialist Subjects: Investment grade credit (and the mysteries of microfluidics…)

Likes: Football, scuba diving and jiangsu cuisine

Heroes: Alfred Wegener, Charles Darwin and Stanislav Petrov

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