UBS’ Credit Suisse takeover will lead to the write-off of CHF16 billion $17.24 billion worth of Additional Tier 1 AT1 bonds, following a call on Sunday by Swiss authorities to override the traditional loss-absorbing hierarchy.
Ahead of the markets’ reopening on Monday March 20, Swiss regulators scrambled to secure a deal that would restore confidence in the embattled Credit Suisse and the wider financial markets, given the bank’s deeply entrenched position as one of 30 systemically important global lenders. Rival bank, UBS, will pay $3.23 billion under the merger deal, which will leave the acquiror as the only surviving entity.
The deal...
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