This is a bit muddled Brendan. An AT1 bond is a type of capital instrument, but not like equity.Because it forms part of their capital.
The more capital they have, the more they can lend.
Deposits don't form part of their capital.
I still think 7.125% is a high yield for a bank with a strong position in a strong economy.
Ryanair borrowed in 2021 at 0.875%!!!
They don’t!These bonds do enable AIB to lend far more than the €625m
Can the matching asset not be a loan book of X times the bond? Think you are splitting hairs.They don’t!
They’re just another liability on the balance sheet that need a matching asset which of course can be a loan.
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