Pimco and Invesco both suffered massive losses because they held the failed Swiss bank's Additional Tier 1 bonds, according to data fromFINMA, which is Switzerland's top financial regulator, marked the value of all Credit Suisse AT1s down to zero when UBS's takeover of the struggling bank was confirmed.
But the reason for those greater returns is that there's more risk attached to them – because the bank can choose to convert them into shares to prop up its capital and reduce its debt if its financial health falls beneath a certain level. Ten individual fixed-income funds also had over $100 million invested in the bank's AT1s, according to aFirst Trust, Nuveen, and Vanguard also had significant exposure to the CoCo bonds, that data shows.
Thought bonds were the safest assets 🙄
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Credit Suisse rescue sends shockwaves far and wide by ViewsroomThe ailing Swiss lender was saved by UBS with a $3 bln takeover. In this Viewsroom podcast, Breakingviews columnists debate why the deal pushes up bank funding costs, how the new mega-lender affects Switzerland’s financial system, and why bank deposits are becoming less reliable. peter_tl LJucca Unmack1 aimeedonnellan UBS now twice the size of the Swiss economy. Bit scary. The Credit Suisse zombie is dead But a monster rises instead A giant UBS Wades out of the mess Will the Swiss come to view it with dread?
Source: Breakingviews - 🏆 470. / 51 Read more »
Breakingviews - Credit Suisse rescue sends shockwaves far and wide: podcastThe ailing Swiss lender was saved by UBS with a $3 bln takeover. In this Viewsroom podcast, Breakingviews columnists debate why the deal pushes up bank funding costs, how the new mega-lender affects Switzerland’s financial system, and why bank deposits are becoming less reliable. They could have secure the depositors and let the bank fail My knowledge on the Swiss economy is limited, but the central bank offering a support package at the size of 1/3 of its GDP is scary for any country. But u have to give it to the Swiss. They might have stopped a new global economic crisis. Adeus... minha prisao se tornou ilegal nodia do meu aniversario... falei Sao Sebastião no dia... Falando com Gabriela... acabou tudo.
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S&P 500 Index: Resistance at 4078/90 likely to cap – Credit SuisseS&P 500 has recovered, but economists at Credit Suisse remain biased to fade strength. Break above 4078/90 to reassert an upward bias “Whilst capped b
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Swiss National Bank raises rates, says Credit Suisse takeover prevented larger crisisThe Swiss National Bank raised its benchmark interest rate by 50 basis points on Thursday and said UBS's takeover of Credit Suisse had averted a financial disaster, adding it was now critical the merger took place in a smooth and fast way. ubs crushing under interest rate hikes and credit suisse burdens Tho the change is sudden, but to be fair, Swtizerland's interest rate still has a comfortable buffer for adjustments. It's a 1%-1.5% change while it was 4.75%-5% for US hours ago. Credit Suisse has been operating without any care about FSA controls on Debt for up to a year. Risk Management within the business has been non-existent such that ALL risks have not been assessed or recorded against financial fiscal rules. CreditSuisse within UBS needs review!
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