UPDATE 1 — India Supreme Court rules Yes Bank's $884 — million AT1 bond write — off illegal, lawyer says

(Adds details and background throughout) By Arpan Chaturvedi and Ashwin Manikandan NEW DELHI/MUMBAI, Oct 15 (Reuters) — India's Supreme Court has ruled the write-off of 84 billion Indian rupees ($884.37 million) of Yes Bank additional tier-1 bonds as illegal, a Supreme Court lawyer related to the matter said on Thursday. AT-1 bonds are debt securities that give a higher return to investors but also typically carry a risk of being written off or converted to equity in times of a crisis. The debt instrumentwas also in focus after Credit ​Suisse's controversial 2023 bond wipeout triggered lawsuits across multiple jurisdictions. These AT-1 bonds were written off after Yes Bank was declared insolvent in 2020, while the equity holders were only subject to a three-year lock-in on 75% of their total shares in the restructuring plan. "The Supreme Court has held the write-off of AT-1 bonds by the Administrator of Yes Bank to be illegal and arbitrary on the ground of it being against the Final Reconstruction Scheme gazetted by the Union of India," said Srijan Sinha, a partner at Edictum Law & Co., the lawyer representing Yes Bank's AT-1 bondholders. Shares of Yes Bank fell 13% on Thursday aft