New Delhi, Oct. 19 -- AT-1 bonds are back in focus after the Supreme Court upheld a Bombay High Court ruling quashing Yes Bank's 2020 write-off of bonds worth Rs.8,415 crore. The verdict marks a landmark win for bondholders whose investments were cancelled during the bank's rescue facilitated six years ago.

Yes Bank plunged into a liquidity crisis in March 2020 as bad loans swelled, prompting the Reserve Bank of India (RBI) to take control of the lender and freeze withdrawals. To stabilise the bank, a consortium of lenders led by the State Bank of India (SBI) was assembled to to inject fresh equity capital.

As part of the exercise, the bank's administrator wrote down around Rs.8,415 crore worth of Additional Tier-1 (AT-1) bonds, prompti...