Investors in a riskier type of Credit Suisse’s bonds had their holdings slashed to zero Sunday after Swiss authorities brokered an emergency takeover of the bank by rival UBS. On Sunday, the Swiss National Bank announced that UBS would buy Credit Suisse for 3 billion Swiss francs — or about 60% less than the bank was worth when markets closed on Friday. Credit Suisse shareholders will be largely wiped out, receiving the equivalent of just 0.
Ordinarily, bondholders are higher up the pecking order than shareholders when a banks fails. But because Credit Suisse’s demise has not followed a traditional bankruptcy, analysts told CNN, the same rules don’t apply. “The hierarchy of claims remains applicable in the EU… there is no way that shareholders can be paid and AT1 holders [are] paid zero,” Benamou said. “The decision taken by the Swiss authorities is really very strange.
Source: News Formal (newsformal.com)
Still struggling to understand how ordinary shareholders take precedence over bondholders. Someone explain it to me please, why the exception in this scenario?
CS equity holders:
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Norway's Oil Fund Has Roughly 1.49% Stake in Credit Suisse, No AT1 Bond ExposureBy Dominic Chopping Norway's sovereign wealth fund had a 1.49% stake in Credit Suisse Group AG at the end of 2022 and a 3.31% stake in UBS Group AG, holdings... Few days before Bloomberg interviewed CS CEO who assured that the bank was well capitalized. And now, Swiss regulator rushed to close a deal at the expense of bondholders. Either CS CEO delivered misleading statement or Swiss regulator closed a wrong deal that isn't so urgent.
Source: MarketWatch - 🏆 3. / 97 Read more »
Musk responds to $100B credit line in $2B UBS-Credit Suisse deal: 'Wow'Twitter CEO Elon Musk responded to the news that UBS would get a $100 billion credit line in the buyout of Credit Suisse for $2 billion, with one word: wow.
Source: FoxBusiness - 🏆 458. / 53 Read more »
Credit Suisse writes down $17 billion of bonds, angering holdersCredit Suisse has written down its Additional Tier 1 bonds to zero as part of its takeover by UBS, angering some bondholders who thought they would be better protected in a rescue deal announced on Sunday. Contagion gonna get ugly
Source: Reuters - 🏆 2. / 97 Read more »
Investors dump Credit Suisse stock and bonds after UBS rescueInvestors dumped Credit Suisse shares and bonds on Monday after rival UBS agreed at the weekend to take over the 167-year old bank for just a fraction of its market value, with hefty backstops from the Swiss government. MohammedSekouty Hope for the best, prepare for the worst. does the swiss banking system havea secuity system Oh oh…. That’s not going to go down well with most people in North America and their coffee this morning. Just sayin’… 😎🇨🇦🌍🌏🌎🇺🇸😎
Source: Reuters - 🏆 2. / 97 Read more »
The $275 billion bank convertible bond market thrown into turmoil after Credit Suisse's securities wiped outSwiss regulator Finma's write down of 16 billion Swiss francs ($17.2 billion) of risky bonds in Credit Suisse caused the price of AT1 bonds across the market... The market deems this bullish. Who was using those bonds as collateral?
Source: MarketWatch - 🏆 3. / 97 Read more »
Credit Suisse faces demise as UBS, Swiss regulators discuss takeoverFuture of 167-year-old Credit Suisse in question amid reports of a takeover by rival UBS as soon as Saturday evening as world economies scramble to prevent another global financial contagion
Source: trtworld - 🏆 101. / 63 Read more »