Yes Bank is unlikely to pay coupons on its additional tier-1 bonds this fiscal year, even as bondholders press for payment, according to sources.
The bank has signalled that the payments may not be made. This comes after a Supreme Court decision that annulled the earlier write-off of these bonds. The write-off had wiped out the value of the securities, and the court’s ruling has now reopened the question of what investors are owed.
Bondholders are using the judgment to argue for repayment. They point to the court’s emphasis on dues that remain unsettled. In their view, the ruling means the bank cannot treat the obligations as closed and should honour the coupons on the bonds.
Yes Bank sees the matter differently. It maintains that it has ultimate authority over whether coupons are paid. That position gives the bank room to hold back payment, regardless of the pressure from investors.
The bank’s financial losses are also a concern. They raise questions about whether Yes Bank can meet these obligations, and they may weigh on any decision about coupons. Additional tier-1 bonds are a form of capital that banks use to strengthen their balance sheets, and their terms typically give the issuer some discretion over payments.
For now, the two sides stand apart. Bondholders believe the Supreme Court’s decision strengthens their claim, while the bank is holding to its right to decide on coupons. Investors in the bonds will be watching to see whether the bank changes course or whether the dispute goes further.