Rules For Thee but Not for Me: Holders of AT1 Credit Suisse bonds get nothing as shareholders get billions 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%
Analyst 
James Van Straten
James fervently appreciates data, technology, and trend-spotting. As a tech and liberty maximalist, he hails Bitcoin as the 21st century's paramount invention.
