**What’s the Canary in the Overpriced-Asset Coal Mine?**
One obvious “tweety bird” is the riskiest type of bank debt, known as perpetual additional tier one bonds. These securities allow regulators to wipe out investors if a bank fails. To compensate for this risk, they offer the highest yields for lending to financial firms.
Interestingly, this specialized asset class’s credit spreads are tightening despite a surge in issuance. However, this trend is not the red flag you might initially think.
https://www.bloomberg.com/opinion/articles/2025-10-08/risky-bank-debt-is-rationally-exuberant