Most riskier dollar bonds sold by banks in the Asia-Pacific region rebounded early on Tuesday after a rout triggered by the wipeout in Credit Suisse Group’s Additional Tier 1 debt a day earlier.

Thirty-six of the 38 Additional Tier 1 dollar bonds to trade as of 10:50 am in Hong Kong gained, with Westpac Banking Corp.’s perpetual notes rising 5.4 cents against the dollar to 84.4 cents, the most on record, according to prices compiled by Bloomberg. Two fell, the data show.

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Three of the four biggest gainers have terms that will convert the bonds into equity if the issuer runs into trouble. Notes that have a temporary write-down clause, which gave some protection for investors instead of a permanent write-down, were also among the biggest movers. 

The selloff on Monday followed the wipeout of 16 billion francs ($17.3 billion) of Credit Suisse’s riskiest bonds after UBS Group AG agreed to buy the bank in a historic, government-brokered deal aimed at containing a crisis of confidence that had started to spread across global financial markets. 

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On Tuesday, perpetual notes from Macquarie Bank Ltd. jumped 7.9 cents to 87.3 cents, while Australia and New Zealand Banking Group’s perpetual note advanced nearly 3.5 cents to 95.8 cents per dollar. The perpetual debt of The Bank of East Asia rose 3.2 cents, rebounding from a record daily drop.

Additional Tier 1 notes were created after the Global Financial Crisis to ensure that losses in times of crises would be borne by investors, rather than taxpayers bailing out borrowers.

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