Using ETFs to better access AT1 bond markets

The AT1 bond has a very global market, reflective of the investor types who wish to use these bank-issued convertible instruments. However, as they are particularly sensitive to US Treasury movement as a result of their call and reset features which are based on futures rate moves, trading in them can be challenging in the current environment.

Invesco’s AT1 Bond Exchange Traded Fund captures the USD denominated bonds, with over 80 issuances targeting the most liquid bonds, so investors can benefit from subordination and a 350 basis point Z spread.

Deepak Bharti and Rob Simnick from Invesco discuss how investors are using this instrument to trade into the AT1 market most effectively.

Published on November 23, 2021

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