Insights

Rules For Thee but Not for Me: Holders of AT1 Credit Suisse bonds get nothing as shareholders get billions

exchange68September 13, 2024

0 2 1 minute read

Quick Take

As UBS bought out Credit Suisse for $3.2 billion yesterday, stocks head lower in pre-market moves.
This is a 73% discount on Friday on Credit Suisse’s closing price.
The biggest losers of this trade were the holders of Additional Tier 1 (AT1) bonds. This a debt instrument where holders are repaid before shareholders.
But that didn’t happen as Credit Suisse confirmed shareholders would get $3 billion, and $17 billion of AT1 holders would get nothing.
In a Bloomberg article.”Wiping out AT1 holders while paying substantial amounts to shareholders goes against all the international resolution principles and rules agreed upon after 2008.”
Could other countries repeat the same as what the Swiss government did?

Pre Market Moves

UBS: -4%
Credit Suisse: -7%
First Republic: -33%
Deutsche Bank: -2%

Analyst

James Van Straten

Former Lead Analyst at CryptoSlate

James fervently appreciates data, technology, and trend-spotting. As a tech and liberty maximalist, he hails Bitcoin as the 21st century’s paramount invention.

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