YES Bank fallout: AT-1 bonds see spike in yields post RBI's proposed scheme

State Bank of India's bonds see 130 basis points jump in yields since Friday

The yields on banks' additional tier-I bonds (AT-1) -- also called perpetual bonds -- have started to see a spike in light of Reserve Bank of India's (RBI) move to write down YES Bank's bonds as part of its reconstruction scheme.

Among the AT-1 bonds issued by banks, State Bank of India's (SBI) perpetual bonds have seen 100-130 basis points (bps) spike in yields. "The jump in SBI yields is indicative of AT-1 bond market, as it is among the most traded AT-1 bonds and has the lowest risk-perception among the AT-1 bonds trading in the market," said a fund