Dependence on the AT-1 Bonds by Indian Banks

Current Context: AT-1 bonds are securities which have loss-absorbing features and can be written down in any circumstances.

• AT-1 written off by Yes bank in March 2020, after RBI had done reconstruction of the bank with equity given to the bank.
• Indian banks have raised AT-1 bonds at 65-75 bps over government bonds.
• Among the top 3 issuers of AT-1 bonds are SBI, HDFC and CANARA bank.
• The smaller banks have lower contribution to the bonds.
• The risks related to private sector AT-1 bonds are less than public sector banks bonds.

Question:

Q.1 Indian banks have raised AT-1 bonds at _____ bps over government bonds.
a. 65-75bps

b. 45-55bps
c. 34-54bps
d. 23-56bps