16 billion Swiss francs ($17.3 billion) of Credit Suisse, CS, bonds have become worthless after takeover by UBS

About 16 billion Swiss francs ($17.3 billion) of Credit Suisse, $CS, bonds have become worthless after takeover by UBS, per Bloomberg.

The deal will trigger a “complete write-down” of the bank’s additional tier 1 bonds in order to increase core capital, Swiss financial regulator FINMA said.

The bank’s shareholders are set to receive 3 billion francs, per Bloomberg.

The bond wipe out is the biggest loss yet for Europe’s $275 billion AT1 market.

“This just makes no sense,” said Patrik Kauffmann, a portfolio manager at Aquila Asset Management AG, said to Bloomberg. “This will be a total blow to the AT1 market. You can quote me on that.”

UBS bought Credit Suisse, $CS, for more than $3 billion.

The Swiss government said it would provide more than $9 billion to backstop some losses that UBS may incur by taking over Credit Suisse. The Swiss National Bank also provided more than $100 billion of liquidity to UBS to help facilitate the deal.

tastytrade logo+
Get the best broker for options trading and earn Unusual Whales discounted! in cash with an eligible account deposit at tastytrade. Get an Unusual Whales bonus when you deposit $2000. Offer expires 3/31/25. Certain restrictions, terms and conditions apply.