AT1 Debt Selloff Causes HSBC to Fall in Hong Kong

Shares of European banks traded in Asia, including HSBC and Standard Chartered, tumbled as investors weighed the collapse in the value of additional tier 1 (AT1) bonds issued by lenders following the terms of Credit Suisse's rescue. The complete write-down of Credit Suisse's AT1 debt as part of a Swiss bailout has investors in the $275 billion market scrambling to determine how much protection the notes offer in a crisis. The repercussions can be twofold, with banks such as HSBC potentially needing to find new sources of capital if there's a loss of confidence while their holdings of such debt issued by peers may see a significant loss of value.