AT1s, or Additional Tier 1 Capital Bonds are securities issued by European banks for regulatory purposes. Given their subordinated position within the capital structure, AT1s offer a higher yield than more senior debt from the same issuer. Furthermore, they are callable securities, which means they have relatively little interest rate risk. These hybrid securities have become increasingly attractive for yield-seeking investors, with the asset class maturing to a current market capitalisation of over US$250 billion.1