
Supreme Court's dismissal of Yes Bank's appeals leaves the bank's AT1 bondholders in a precarious position. The October 15 court order had restored the bonds, yet the 9% coupon set for October 18 remains unpaid.
The bondholders, organized under the Yes Bank AT1 Retail Bond Holders Association, cite the Companies Act and SEBI obligations to secure payment. They also demand settlement of coupons skipped between 2020 and 2025, and arrangements for the upcoming 9.5% coupon due December 23.
Revisiting past coupons could trigger legal and accounting complications. The March 2020 write‑off was recorded in profit and loss, so restoring the bonds could alter the bank's historical earnings. Coupon payments on high‑risk AT1 instruments hinge on the bank’s financial performance.
The association has asked Axis Trustee Services to disclose the bank’s stance on each missed coupon, cancellation notices, and correspondence since March 2020. They also seek coordination with NSDL, CDSL, RBI, and SEBI to restore demat holdings.
Looking ahead, Yes Bank may need to address the outstanding debt to satisfy bondholders and avert regulatory intervention. Failure to do so could expose the bank to further legal action and erode investor confidence in its capital‑raising instruments.