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