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.
16 billion Swiss francs ($17.3 billion) of Credit Suisse, CS, bonds have become worthless after takeover by UBS
3/19/2023
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