ZURICH (Reuters) – The Swiss financial market regulator on Thursday asked Credit Suisse to fully write down its Additional Tier 1 (AT1) bonds and to immediately notify affected bondholders in view of the bailout plan. from which the bank benefited.
“The AT1 instruments issued by Credit Suisse contractually provide that they will be fully impaired in the event of a ‘viability event’, in particular in the event of the granting of exceptional public assistance,” FINMA said.
“Credit Suisse having received on March 19, 2023 extraordinary aid loans in the form of cash covered by a default risk guarantee provided by the Swiss Confederation, these contractual conditions apply to the AT1 instruments issued by the bank”, continues the lender. ‘authority.
Tier 2 bonds are not affected by these impairments, said FINMA.
As part of a deal orchestrated by the Swiss authorities, UBS agreed on Sunday to buy Credit Suisse for three billion Swiss francs (3.04 billion euros) with significant support from the Swiss government.
Swiss regulators then decided that the value of Credit Suisse’s AT1 securities would drop from 16 billion francs to zero, angering some debt holders who believed they were better protected than shareholders under the deal. between number one and two in Swiss finance.
(Reporting John Revill; Claude Chendjou, editing by Kate Entringer)
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