AT1s’ Market-Beating Rally Still Leaves Some Buyers Wanting More

AT1s have charted a nearly uninterrupted rebound from one of the most dramatic blow-ups the credit market has ever seen. That’s left some yearning for more drama.

The riskiest form of bank bonds, Additional Tier 1 notes are heading to their best annual returns in five years with the smallest losing streak of any year in a Bloomberg index launched a decade ago. They were hardly scathed by the panic that hit global markets on Aug. 5 and are beating high-grade and high-yield peers.

The scot-free year is making investors comfortable and concerned in equal measure. Many say they would ...