Explainer: What are AT1 bonds and why are Credit Suisse's wiped out?:
Financial markets have been thrown a fresh curve ball by the decision to write down 16 ...
reuters.com/markets/why-markets-are-uproar-over-risky-bank-bond-known-at1-2023-03-24/
Photo: reuters.com · view article
Credit Suisse AT1 Write-Off Pressures European Bond MarketThe UBS rescue deal wrote off 16 billion Swiss francs of Credit Suisse AT1 bonds to zero.
Key FactsMar 24, 2023 · Reading time: ~45 sec.
Summary created with AI assistance · Source: reuters.com
Summary created with AI assistance · Source: reuters.com
- AT1 bondholders will receive nothing, while Credit Suisse shareholders will receive $3.23 billion under the transaction.
- The AT1 sector totals $275 billion; these riskiest bank bonds can convert into equity or be written off.
- AT1 bonds normally rank above shares, but Swiss terms did not require the regulator to preserve that hierarchy.
- Prices of other European AT1 bonds fell, while Credit Suisse bondholders are seeking legal advice.
The move had 'profound' implications for global bank regulations.— Bill Winters, Chief Executive of Standard Chartered, said the move had profound implications for global bank regulations.
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Key FactsSources: UBS reviews options for Credit Suisse’s Swiss business
May 4, 2023 · Reading time: ~30 sec.
Summary created with AI assistance · Source: reuters.com
Summary created with AI assistance · Source: reuters.com
- UBS is studying an IPO of Credit Suisse’s Swiss banking business after the takeover, according to anonymous sources.
- A further source said the review was at an early stage; UBS was focused on completing the takeover, and a decision could take months.
- UBS CEO Sergio Ermotti said Wednesday the bank was working to complete the merger by the end of May or early June.
- Credit Suisse’s Swiss unit reported 1.5 billion Swiss francs ($1.7 billion) in pre-tax income in 2022.
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