Swiss regulator defends its decision to write off AT1 bonds - Reuters
Mar 23, 2023 45 secs
The decision that prioritised shareholders over AT1 bondholders rattled the $275 billion AT1 bond market, prompting a sharp fall in prices on Monday.

"The AT1 instruments issued by Credit Suisse contractually provide that they will be completely written down in a 'viability event', in particular if extraordinary government support is granted," FINMA said.

"As Credit Suisse received extraordinary liquidity assistance loans secured by a federal default guarantee on 19 March 2023, these contractual conditions were met for the AT1 instruments issued by the bank," it added.

FINMA Director Urban Angehrn said that "a solution was found on Sunday to protect clients, the financial centre and the markets".

In a bid to boost confidence among bondholders, UBS(UBSG.S) said on Wednesday it would buy back 2.75 billion euros worth of debt it sold just days ago.

A pedestrian walks past a logo of Credit Suisse outside its office building in Hong Kong, China March 21, 2023.



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