The newspaper writes that Swiss bank Credit Suisse’s bondholders lost more than $17 billion due to its merger with the country’s largest bank, UBS. Finance Times.
According to him, Swiss regulator Finma has requested that 16 billion Swiss francs (approximately $17.26 billion) of Tier 1 (AT1) bonds be written to zero as part of the bank merger. The regulator stated that the emergency support would lead to the complete devaluation of Credit Suisse’s approximately 16 billion francs worth of AT1 shares and an increase in core capital.
The publication notes that Asian banks’ shares have already fallen after the announcement of Credit Suisse’s takeover by UBS, with experts expecting “more turmoil in European markets”. Finma’s decision means that bondholders lose more than shareholders, and casts doubt on the hierarchy of receivables should a bank go bankrupt. According to the FT, it was AT1’s largest debt write-off to date.
the previous day recognized UBS bought Credit Suisse for $3.24 billion (3 billion francs). Initially, UBS offered 1 billion francs for the deal.