Supreme Court upholds quashing of Yes Bank’s Rs 8,415-crore Additional Tier-1 bonds write-off

On Thursday, the Supreme Court ruled to overturn the quashing of Yes Bank’s Rs 8,415-crore Additional Tier-1 (AT-1) bond write-off. The bank's shares dropped 14.43% to Rs 18.15 in response to the decision. The lender has stated it is reviewing the judgment and its potential consequences before releasing any additional information.

Yes Bank argued that the Supreme Court's ruling, handed down on October 15, stemmed from appeals against the Bombay High Court's January 20, 2023 decision that overturned the AT-1 bond write-down. The bank maintains it is unaware of any undisclosed factors influencing its securities and is awaiting further guidance from the Supreme Court before providing more details.

The write-off occurred in March 2020, following Yes Bank's disclosure that it had written off the AT-1 bonds in accordance with legal and regulatory requirements. Subsequent legal challenges were lodged before the Bombay High Court, which ultimately dismissed the write-off on January 20. The AT-1 bonds are unsecured, perpetual instruments issued by banks to bolster their capital reserves, carrying higher risks than conventional bonds and ranking below other debt but ahead of common equity.