Lloyds faces Santander moment as AT1 call looms

By David Freitas
22 May 2019

Lloyds is yet to confirm whether it will redeem an outstanding additional tier one (AT1) deal, callable on June 27, just as banking authorities have increased the pressure on financial institutions to justify their decisions to call such debt.

For the first time in the financial institutions bond market, Santander in February announced it would not call an old series of euro AT1 notes. It blamed economic conditions.

Bond investors had previously assumed that AT1 deals would be called and refinanced meaning Santander's decision caused some considerable shock.


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