MFs hold nearly a fifth of AT-1, Tier-2 bonds issued by banks: Nomura

On March 10, the market regulator said that no MF under all its schemes shall own more than 10% of AT-1 bonds and Tier-2 bonds issued by a single issuer

Mutual funds (MFs) hold nearly a fifth of AT-1 and Tier-2 bonds issued by banks, valued overall at Rs 3.5 trillion, as per an estimate by Nomura.

“We estimate the system level AT-1 and Tier-2 bonds at Rs 3.5 trillion, of which mutual funds hold a sizable 19 per cent share. While we do not have a segregation of mutual funds’ exposure by type of bonds (AT-1, Tier-2, Infra bonds), we believe most of it will be AT-1 and Tier II bonds,” said the brokerage said in a note.

On March 10, the market regulator said that no MF under