Trade Alert: Switzerland

ONE YEAR ON: The $17B Write Down of the Credit Suisse AT1 Bonds

In the twelve months prior to the UBS takeover, Credit Suisse had lost 75% of its value with $75 billion of customer deposits lost in the first quarter of 2023 and was heading towards collapse in what would have been one of the largest banking failures since the fall of Lehman Brothers in 2008. Swiss National Bank Chairman, Thomas Jordan, explained that if UBS and the Swiss state had not stepped in, “Credit Suisse would have failed, with extreme consequences for Switzerland but also the global economy".

As part of the UBS takeover, FINMA (the Swiss Financial Market Supervisory Authority) ordered Credit Suisse to write down in full all Additional Tier 1 capital instruments (“CS AT1 Bonds”) with a combined value of around $17.3 billion (the “Write-Down”), making this the largest loss in the $275 billion AT1 bond debt market to date, as reported by Reuters.

This alert considers the potential AT1 Swiss claims in connection with the Write-Down and highlights some of the key legal risks for investors in the secondary market.

Click to view the full alert here.

For more information on claims trading of CS AT1 Bonds and detailed guidance from Swiss counsel, Vischer, please refer to our CS AT1 claims trading Q&A here.

SPECIAL THANKS
We appreciate the assistance of Dr. Markus Guggenbühl, Dr. Sandro Bernet and Maximilian Riegel of Vischer with the preparation of this update on Swiss law, regulation, and practice.

CONTACT
Please contact Louisa Watt, Iden Asl or Katrina Hart with any queries regarding this Trade Alert.

Click to view the full alert.