This article was last updated on March 20, 2023
Credit Suisse merges with UBS
Credit Suisse has announced that its Additional Tier 1 (AT1) debt, amounting to 16 billion Swiss francs ($17.24 billion), will be written down to zero on the orders of the Swiss regulator as part of its rescue merger with UBS.
This move has angered bondholders, as they appear to be left with nothing while shareholders will receive $3.23 billion under the UBS deal. The decision was made by FINMA, the Swiss regulator, in an effort to bolster the bank’s capital and to see private investors share the pain from Credit Suisse’s troubles.
The move has raised concerns among investors that it could make it harder for other lenders to raise new AT1 debt, as the bonds are now seen as carrying extra risk.