Credit Suisse writes down $17 billion in debt, angers them – Business & FinanceSUCHI News

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LONDON: Credit Suisse has written its Tier 1 deposits down to zero as part of a takeover by UBS, angering some bondholders who thought they would be better protected in a rescue deal. was announced on Sunday.

Swiss authorities and Credit Suisse said the bonds, a type of debt that is riskier than traditional bonds, have a net value of 16 billion Swiss francs ($17.24 billion). Credit Suisse said it was informed by the regulator, FINMA, on Sunday about the decision to write down.

The president of FINMA, Marlene Amstad, when asked about the decision at a press conference after the UBS announcement, said that the regulator decided to stick to the large-scale principle. -e-damage and induce liability.

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Engineered as a result of the global financial crisis, AT1 – or CoCo – is a type of micro-debt that refers to bank regulated funds. They sit above equity on the priority ladder for repayment in a bankruptcy proceeding, and are designed to be converted into shares when the owner’s capital is wiped out. debt beyond a certain limit.

Some bondholders were angered by the move to write down bonds to zero, especially since it seemed that bondholders would be worse off than stockholders in the transaction.

“It is surprising and difficult to understand how they transfer control between AT1 holders and shareholders,” said Jerome Legras, head of research at Axiom Alternative Investments, a investors in Credit Suisse’s AT1 debt.


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