AT1 Investor FOMO Shields Market From Global Selloff in Risk

Investors are clinging to Additional Tier 1 (AT1) bonds amid global market turbulence, driven by fear of missing future access to these high-yield assets during the Iran war-induced selloff. The risky bank debt has defied broader financial downturns, with AT1 bonds avoiding severe losses despite widespread risk aversion across global markets since early March 2026. Demand persists due to scarcity concerns, as investors anticipate tighter supply or regulatory changes could limit future issuance of these hybrid instruments. AT1 bonds, designed to absorb losses during bank crises, remain attractive for their high yields, outweighing geopolitical risks for yield-hungry portfolios. The trend highlights a disconnect between AT1 resilience and broader market declines, underscoring investor confidence in their long-term value despite short-term volatility.