It stands for additional tier-1 sukuk; the additional proceeds from a sukuk issuance that are used to enhance an entity’s main sources of liquidity and meet the minimum necessary tier-1 capital threshold (capital adequacy) or to provide a better basis for the entity to cope with financial uncertainty, current or expected. Additional tier-1 sukuk are issued in addition to an existing issuance of tier-1 sukuk / T-1 sukuk (tier-1 capital sukuk).
Like tier-1 sukuk, additional tier-1 sukuk constitutes part of the first or core layer of a bank’s capital (core capital), which, per se, is the so-called tier-1 capital, due to the very nature of the instrument: possessing the features equity (equity-type sukuk).
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