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A pedestrian looks at his phone as he walks past a logo for Australia's Westpac Banking Corp located outside a branch in central Sydney, Australia, November 5, 2018. REUTERS/David Gray/File Photo Acquire Licensing RightsSYDNEY, Nov 20 (Reuters) - Westpac Banking Corp (WBC.AX), Australia's third largest bank by market capitalisation, said on Monday it would raise A$750 million ($488.1 million) in an Additional Tier 1 (AT1) capital transaction. The AT1 bonds are used by banks to stabilise cashflow in periods of stress, according to APRA. Under that deal, holders of Credit Suisse AT1 bonds received nothing, while shareholders, who usually rank below bondholders in terms of who gets paid when a bank or company collapses, received $3.23 billion. ($1 = 1.5366 Australian dollars)Reporting by Scott Murdoch in Sydney; Editing by Muralikumar Anantharaman and Stephen CoatesOur Standards: The Thomson Reuters Trust Principles.

Persons: David Gray, Stephen Jones, Scott Murdoch, Muralikumar Anantharaman, Stephen Coates Organizations: Australia's Westpac Banking Corp, REUTERS, Rights, Westpac Banking Corp, Westpac, prudential, Credit Suisse, APRA, Credit Suisse AT1s, Commonwealth Bank, Credit, Thomson Locations: Sydney, Australia

Logos of Swiss banks Credit Suisse and UBS are seen before a news conference in Zurich Switzerland, August 30, 2023. The state-engineered merger led to a wipeout of $17 billion of Credit Suisse's AT1 bonds. "Their structure is very new and shows they listened to investors who were angry about the permanent write-down feature," said Jerome Legras, head of research at Axiom Alternative Investments, who held Credit Suisse AT1 bonds before the March banking crisis. The Credit Suisse AT1s wipeout spurned a number of claims against Switzerland's financial regulator FINMA, which inverted the long-established seniority of bondholders over shareholders over the assets of a company in distress. That dented sentiment in the key market for bank bonds and prompted regulators in Europe and Asia to reassure investors.

Persons: Denis Balibouse, Jerome Legras, Joost Beaumont, March's writedown, Noele Illien, Dhara Ranasinghe, Elaine Hardcastle, Alexander Smith Organizations: Credit Suisse, UBS, REUTERS, CS, AT1s, ZURICH, P Global, Suisse, ABN AMRO, Singapore, Thomson Locations: Zurich Switzerland, Swiss, Switzerland's, Europe, Asia

There are some signs that the broader $275 billion AT1 market is recovering. Reuters GraphicsLast month, Japan's Sumitomo Mitsui Financial Group (8316.T) was the first major global bank to sell AT1s since the March rout. With time, analysts expect UBS to sell AT1s aplenty to meet its capital requirements. It has a 700 million Singapore dollar ($755 million) AT1 bond repayable in November followed by a heftier $2.5 billion bond in January. RATINGS GAMEInvestor appetite for a UBS AT1 could also hinge on its future credit profile.

[1/2] The Credit Suisse logo is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 16, 2023. Credit Suisse AT1 bondholders get nothing under the UBS merger deal. A WisdomTree exchange traded fund that tracks a broad index of bank AT1s, has dropped 11% in the past fortnight. Credit Suisse AT1s made up less than 3% of the fund just before the Swiss bank's rescue, the asset manager disclosed. Deutsche Bank AT1 debt is trading at 74 cents on the dollar, off last week's lows around 67 cents but still below levels seen before the Credit Suisse writedown, Tradeweb data shows.

☆ Bond giants Pimco and Invesco are facing losses of hundreds of millions on rotten Credit Suisse debt
▼ + stars: | 2023-03-25 | by ( George Glover | ) www.businessinsider.com time to read: +3 min

Bond giants Pimco and Invesco lost hundreds of millions of dollars, according to data from Bloomberg. They held Credit Suisse's AT1 bonds – which were marked down to zero by the Swiss regulator a week ago. FINMA, 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. Pimco had $807 million worth of Credit Suisse CoCos written off when the bank was rescued, according to Bloomberg – while Invesco held around $370 million worth of AT1 debt at the time of the takeover. Here's what you need to know about AT1 bonds.

LONDON, March 23 (Reuters) - Credit Suisse (CSGN.S) bondholders are seeking legal advice after the Swiss regulator ordered 16 billion Swiss francs ($17.5 billion) of Additional Tier-1 (AT1) debt to be wiped out under its rescue takeover by UBS (UBSG.S). Not only did bondholders expect protection, but UBS is paying $3.23 billion to Credit Suisse shareholders. One Paris-based manager of a debt fund that held Credit Suisse AT1s said he had been "spammed" with emails from lawyers. Facing any challenge could be Credit Suisse, its new owner UBS, Swiss regulator FINMA or the Swiss government. It also cited an emergency March 19 ordinance which it said authorised FINMA to instruct Credit Suisse to write off the bonds.

☆ Big investor in Credit Suisse bonds says 'bail-in' system worked
▼ + stars: | 2023-03-22 | by ( Herbert Lash | ) www.reuters.com time to read: +3 min

The firm's exposure to Credit Suisse AT1s represented 1.32% of Spectrum's assets under management (AUM) on Feb. 28. In 2021 and early 2022 Spectrum held about $400 million of Credit Suisse AT1 bonds, Jacoby said. The Credit Suisse debt represents about 12% of the benchmark for CoCos, a massive slice of the ICE BofA U.S. dollar contingent capital index (.MERCOCO), he said. "We had been paring back in Credit Suisse, had an internal negative outlook for a little over a year." "This is a Credit Suisse event and this is a Swiss bank regulation event, this is not a global disaster for CoCos."

LONDON, March 21 (Reuters) - Distressed debt investors and large hedge funds are buying up Credit Suisse (CSGN.S) additional tier-1 bonds at rock-bottom prices after they were written down to zero in the Swiss bank's rescue by cross-town rival UBS (UBSG.S). AT1 bonds issued by other European banks tumbled on Monday as the treatment of Credit Suisse AT1 bondholders highlighted the risks of this type of debt. Buyers have included a mixture of hedge funds and deep distressed debt funds, which Southey expected would need to hold the bonds for an extended period before they paid off. Some of those buyers intend to join groups that would litigate to improve odds on cashing in on the bonds, Southey said. "It's quite possible that we will see demand from buyers of subordinated bank debt to have more explicit protections written into these bond prospectuses in the future."

☆ Everything you need to know about UBS's historic $3 billion deal to rescue rival bank Credit Suisse
▼ + stars: | 2023-03-21 | by ( George Glover | ) www.businessinsider.com time to read: +6 min

UBS agreed to buy its longtime rival Credit Suisse for $3 billion on Sunday. There's one big winner — and lots of losers — from the Credit Suisse rescue deal. The deal announced Sunday afternoon valued Credit Suisse shares at just 0.76 Swiss francs, one-fifth of the price the Saudi National Bank paid. Lastly, the merger between UBS and Credit Suisse could be bad news for the Fed. Here's how the Credit Suisse rescue deal impacts the central bank.

☆ Explainer: Why markets are in uproar over a risky bank bond known as AT1
▼ + stars: | 2023-03-20 | by ( ) www.reuters.com time to read: +4 min

Here are some of the implications of the Credit Suisse AT1 bond write-down. WHAT IS AN AT1 BOND? Credit Suisse AT1 holders, therefore, are the only ones not to receive any kind of compensation. It is not the first time that the treatment of AT1 bonds in a bank overhaul has caused controversy. The decision to write down Credit Suisse AT1 bonds to zero is viewed as negative for the AT1 bond market globally.

☆ French insurer AXA has about $640 mln exposure to Credit Suisse
▼ + stars: | 2023-03-20 | by ( ) www.reuters.com time to read: 1 min

PARIS, March 20 (Reuters) - French insurer AXA (AXAF.PA) had a "limited exposure" of about 0.6 billion euros ($639.5 million) to Swiss bank Credit Suisse (CSGN.S), it said on Monday. "AXA has no exposure to Credit Suisse AT1s or to Credit Suisse equity. The group has limited exposure to Credit Suisse of circa 0.6 billion euros, comprising covered bonds and senior bonds. AXA has less than 20 million euro exposure to bank AT1s," the insurer said in an emailed statement. ($1 = 0.9383 euros)Reporting by Sudip Kar-Gupta Editing by David GoodmanOur Standards: The Thomson Reuters Trust Principles.

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