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

Quick Take

• As UBS bought retired Credit Suisse for $3.2 cardinal yesterday, stocks caput little successful pre-market moves.
• This is simply a 73% discount connected Friday connected Credit Suisse’s closing price.
• The biggest losers of this commercialized were the holders of Additional Tier 1 (AT1) bonds. This a indebtedness instrumentality wherever holders are repaid earlier shareholders.
• But that didn’t hap arsenic Credit Suisse confirmed shareholders would get $3 billion, and $17 cardinal of AT1 holders would get nothing.
• In a Bloomberg article.”Wiping retired AT1 holders portion paying important amounts to shareholders goes against each the solution principles and rules that were agreed internationally aft 2008.”
• Could different countries repetition the aforesaid arsenic what the Swiss authorities did?

Pre Market Moves

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

At1 Holders: (Source: Financial Times)

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