Banks typically repaid AT1 bonds after five years
Credit Suisse wiped out billions, shocked investors
Some small banks no longer repaying

June 2 Reuters Investors who earned easy money with highrisk bonds invented after the financial crisis are being forced to accept that the rules have changed they may not get paid.

Banks typically sold these perpetual bonds known as AT1 bonds with five years before an option to repay was triggered. In the past, investors got their money back, and banks replaced the bonds with new ones, but some are changing tack.

The trend highlights the vulnerability of global finance as it grapples with rocketing borrowing costs and the impact of war in Ukraine.

Earlier this year, Credit Suisse39;s near collapse prompted a Swiss governmentbacked rescue that wiped out billions of dollars of AT1 bonds, stunning investors and pushing up the cost for other banks wanting to sell their own.

Now some smaller banks are no longer repaying the bonds in an unwelcome development for investors opting instead to keep them openended beyond five years and paying interest on them instead.

Austria39;s Raiffeisen Bank International RBI is set to skip again an option to repay its 650 million euro 716 million AT1 bond in the middle of June.

RBI is committed to calling and refinancing at the earliest possible date, provide the economics make sense, an RBI spokesperson told Reuters.

That follows two German banks, Deutsche Pfandbriefbank and Aareal Bank,…