YES Bank files review petition in SC over ₹8,415 crore AT-1 bond write-off | Today’s news
Mumbai: YES Bank has asked the Supreme Court to review its October 15 order upholding the Bombay High Court order against the write-off ₹8,415 crore of additional tier-1 (AT-1) bonds, a move that could extend bondholders’ wait.
“The bank filed a review petition under Article 137 of the Constitution of India in the Supreme Court of India to review its judgment and order dated 15 ₹8,415 million crowns,” the lender told the stock exchanges late Friday evening.
In its October 15 ruling, the Supreme Court dismissed appeals by YES Bank, the Reserve Bank of India (RBI) and the Centre, and upheld a Bombay High Court order that held that the bank administrator had no power to write off the bonds as part of the 2020 bailout.
The case relates to the AT-1 perpetual bonds that were written off under the YES Bank Reconstruction Scheme, 2020. The bondholders and the trustee, Axis Trustee Services, challenged the decision in the Bombay High Court, which in January 2023 set aside the write-off.
The Supreme Court directed YES Bank to return the bonds to the bondholders with immediate effect. As the lender has yet to act on the judgment, the YES Bank AT-1 Bond Holders Association, which represents around 400-450 affected investors, and Axis Trustee Services have written to the bank asking for the renewal of the bonds and payment of outstanding interest charges.
“The bank will take all steps and actions that are necessary and permissible under applicable law,” including follow-up, available legal remedies and other steps that may reasonably be taken in accordance with law, Axis said in a letter to administrators dated May 30.
The lender reiterated the same in other disclosures and also informed stakeholders that it continues to evaluate and assess the matter
YES Bank shares ended 0.3% lower ₹On Friday at 17:42 at the National Stock Exchange.
The renewal of bonds is expected to have a significant impact on capital and margin for lenders. CEO and managing director Vinay Tonse said in the earnings release that the AT-1 principal recovery is expected to have a pro forma impact of around 240 basis points on the bank’s tier-1 equity ratio, including earnings. As of September 30, the bank’s capital adequacy ratio was 14.5% and the tier-1 capital ratio was 13.7%.
“Our total Tier 1 capital ratio is expected to remain approximately 13.7% on a pro forma basis. We recognize that the difference between CET-1 and total Tier 1 capital is important. We will continue to assess the implications for our capital structure, regulatory buffers, balance sheet strength and future growth plans,” Tonse said.
