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

Pre Market Moves: UBS down 5%, Credit Suisse down 7% and First Republic down 33% — AT1 Credit Suisse bond holders at a loss.

James Van Straten
Mar. 20, 2023 at 12:04 pm UTC
1 min read
Updated: Mar. 20, 2023 at 12:15 pm UTC

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%
At1 Holders: (Source: Financial Times)
At1 Holders: (Source: Financial Times)
Analyst View profile
James Van Straten
James Van Straten
Former Lead Analyst 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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