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India's Yes Bank is unlikely to pay coupons due this ​year on its additional tier-1 (AT1) bonds despite a Supreme Court ruling ‌overturning their write-off during the lender's 2020 rescue, two ​persons familiar with the matter said.

The bank is ⁠preparing to seek a review of the ruling, one of the sources told Reuters, while bondholders press for payment of coupons that have remained ‌unpaid since Yes Bank wrote the bonds off six years ago.

Last week, India's Supreme Court upheld a ‌2023 Bombay High Court ruling that set aside Yes Bank's ‌write-off ⁠of 84 billion rupees ($886 million) worth of AT1 bonds, ⁠in a setback to the lender and regulators that had defended the move.

Yes Bank did not respond to an email seeking comment.

The sources declined ​to be named as ‌they were not authorised to speak on the matter.

Retail investors holding the bonds said on Thursday they had not received coupon payments due on October 18, three days after the SC ‌ruling.

In a letter to Axis Trustee Services Ltd, ​reviewed by Reuters, investors sought clarity on the status of coupon payments and urged the debenture trustee to ⁠intervene.

"We call upon the Trustee to obtain immediate written confirmation from Yes Bank as to whether this coupon has been paid, cancelled ‌or remains outstanding," bondholders said.

They cited the Supreme Court order that payment of annual coupons "shall remain unaffected by the outcome of these appeals and must be made in terms of the Information Memoranda."

The sources, however, said the bond documentation gives the bank discretion over coupon payments and that the issue ‌can only be considered once the AT1 bonds are reinstated on the ​bank's balance sheet.

The losses the bank accumulated during fiscal years 2020 and 2021 are expected to be fully ⁠offset only by fiscal 2028, a third source familiar with the matter ⁠told Reuters. This could weigh on the bank's decision to pay coupons on its AT1 bonds, the source ‌added.

Yes Bank carries a debit balance of 52.79 billion rupees ($557 million) in its profit and loss account, according ​to the lender's latest annual report.

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