Basic investing 101, clauses too complicated until have difficulty to understand fully, there is no need to commit.
There are lot of investment option out there nowadays.
or you have a "soft spot" for the RM?    Just joking.

I don't see how it is a "retail" based bond, it is more like for sophisticated institutional investors with plenty of clauses and understanding needed.

This instrument is a new class of hybrid securities. A hybrid between debt and equity. Its features, particularly the conversion to equity or write down clause, are requirement by Basel III and are to be implemented by Central Banks globally. The purpose of this new hybrid securities is in theory, to reduce the need of a tax payers bailout when a systemically important financial institution fails. Think Lehman Brothers, Ireland and Icelandic banks.

They are globally known as Contingent Convertibles or CoCos. Please Google for more details as it can get really technical.

Tier 1 CoCos ranks BELOW Tier 2, not the other way around. Tier 1 will suffer losses before Tier 2 do. Hence the relatively high coupon and low credit rating for the securities. In fact, Tier 1 securities are designed to be the first in line to absorb losses when things go south. When a bank goes under, the intended creditor order of priority is- depositors, senior bond holders, subordinated bond holders which are Tier 2, then Tier 1 followed lastly by equity or shareholders.

Having said that, the trigger level for a write off is quite far now, given that CIMB's Tier 1 capital ratio is quite high. It would take a 97 crisis meltdown before this trigger event were to occur.

So far, this write off feature has not been tested globally as it was only introduced in 2013.

Those PBB and CIMB IT-1 bonds fall under the previous regime known as Basel II (subordinated debt issued pre 2014) and will no longer be available in the market once the banks call these bonds back.

Basel II bonds are "safer" than Basel III bonds because it lacks the "write down" clause. The "write down" clause means exactly that- if the bank's capital ratios fall below the trigger level, your bond will be written off, you lose your investment. And this can happen without the bank failing, just if the bank suffers from excessive losses from bad debts and other causes.

And no, Additional Tier 1 is not Tier 2.

Tier 2 bonds are safer than Tier 1, as Tier 2 bonds do not have the "discretionary coupon" feature found in Tier 1 bonds and are ranked higher than Tier 1. However, it has the "write down" feature, since all bonds issued under this Basel III regime must include this feature.

And your RM is right, banks will call the bonds at par. However, this is the nature of the bond market because interest rates in the market have declined. If you keep your bond which is priced at a premium right now, you continue to enjoy your high coupons, but it will be reflected in the bond price declining towards par as the call date approaches (assuming that interest rates stay low). Consider it from another angle, you can sell your current bonds and get your capital back at a premium, but can you find a similar bond with similar returns now? Chances are, no. It's a result of interest rates and bond yields falling globally, thanks to central banks and their money printing.

From an investor's perspective, the old bonds (PBB NIT-1 and CIMB IT-1) are definitely safer than this new bond, but the old bonds are on their way out. All new subordinated bonds issued by banks going forward will be like this CIMB hybrid. And thanks to easy monetary policy by central banks, investors have to bear more risk and get paid less in return. Look at European and Japanese bonds trading at negative yields.

However, it is important to remember that banks will not just refuse to pay you a coupon or "write down" your bonds just on a whim. These major banks have their reputation and credibility at stake, and if they were to do anything  "funny" with these bonds, it will result in a major loss of investor confidence. Like I mentioned earlier, the write down will most likely be triggered in a the event of a major financial crisis. So the risk that you will essentially be taking is that of whether CIMB will be badly impacted in a crisis. For the record, the Malaysian banking system weathered through 2009 relatively well. The bottomline is, with this new hybrid bonds, you do risk losing ALL your investment if the bank comes close to failing (what BNM deems as "non-viability").

Sadly to say, the "educational" part of local investment industry is still pretty weak.

We still see many RM or sales person in investment field who promote saving plan as FD already signaled there is a big gap need to fill up.

This hybrid bond definitely need more Q&A, FAQ to educate investors.

But, as always, personally I do wary/concern about new product in investment field.
As previously, bond defaulted generally already means bank goes under, but with the new hybrid bond, the bond may be defaulted without the bank goes under. 

This is a huge different.
Mind that although Malaysia banks did weather the 2008 crisis well, because of 1997 crisis lesson.
If hybrid bond does exist during 1997, then there might be plenty of default that could result like what had happened on Lehman mini bond.

Just hope it doesn't repeat the history of "new product" in financial world, like MGS, minibond (that happened in subprime mess), SPAC (in stock market)

Anyway, appreciated the valuable explanation given, this hybrid bond definitely will be mushrooming in the near future.
But I still do not agree it should be marketed as "retail" based.