DIRS.INFO The most relevant business & tech news

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

☆ CNBC Daily Open: Earning’s better than revenue this season
▼ + stars: | 2023-11-09 | by ( Yeo Boon Ping | ) www.cnbc.com time to read: +2 min

This report is from today's CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Streak continues, sans DowMajor U.S. indexes continued their blistering winning streak Wednesday — except for the Dow Jones Industrial Average, which snapped a seven-day streak. Weakness in ArmArm reported earnings for the first time after its initial public offering. Stock markets are enjoying their longest winning streak in two years.

Persons: Mickey, Minnie, Marks, Spencer, — Organizations: Paris, CNBC, Dow Major, Dow Jones, Disney, UBS UBS, UBS, Credit Suisse Locations: Marne, Paris

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

☆ Credit Suisse staff prepare to sue Swiss regulator over lost AT1 bonuses-FT
▼ + stars: | 2023-05-22 | by ( ) www.reuters.com time to read: +1 min

May 22 (Reuters) - Credit Suisse AG (CSGN.S) staff are preparing to sue the Swiss financial regulator over $400 million of bonuses that were canceled after the troubled lender's rescue by UBS Group AG (UBSG.S), the Financial Times reported on Monday. Quinn Emanuel and Pallas, law firms which are already suing Swiss regulator Finma on behalf of investors who owned AT1 bonds, have received multiple requests from senior managers at Credit Suisse to take legal action on their behalf, the report said. Credit Suisse declined to comment, while Law firms Quinn Emanuel, Pallas and Finma did not immediately respond to Reuters' request for comment. Following this, Switzerland's Federal Council instructed Credit Suisse to cancel or reduce all outstanding bonus payments for the top three levels of management and examine whether those already paid can be recovered. read moreUnder Swiss banking law, the Federal Council can impose bonus-related measures on a systemically important bank if it received state aid from federal funds.

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.

Low and stable inflation is good for markets and the economy, so central banks had to show their seriousness on inflation, Tannenbaum added. Central banks softened rate rises with communication that was mindful of instability risks, showing reassuring "humility", said Perkins. "The bank resolution framework created after the great financial crisis," said Francesco Papadia, senior fellow at Bruegel and former ECB director general for market operations, "is proving difficult to implement." Reuters Graphics4/ UNITED WE STANDAfter CS's rescue, the Fed and other big central banks supported market liquidity with dollar swap lines. Amundi's Pradhan said the "case by case" central bank responses to individual lenders failing in March exposed the lack of a coordinated bank resolution system.

☆ Japan's SMFG is first global bank to sell AT1 bonds since C.Suisse wipeout
▼ + stars: | 2023-04-19 | by ( Junko Fujita | ) www.reuters.com time to read: +2 min

AT1 bonds - the riskiest tranche of a bank's bonds also known as "contingent convertibles" or "CoCo" bonds - can be converted into equity or written off if a bank's capital level falls below a certain threshold. SMFG sold the bonds in two tranches, in 89 billion yen ($662.50 million) five-year notes, and 51 billion yen 10-year bonds. The 89 billion yen issuance carries a coupon rate of 1.879% for the initial five years and two-month period, a regulatory filing showed. "In Japan, where spreads over corporate bonds are thin, the terms for these AT1 bonds were reasonably good, provided that the banking sector is credible," said Pictet's Otsuki. Japanese banks' AT1 bonds had been configured in a way the value is secured even if the government is involved in restructuring, and SMFG's new issues are seen to have the same features, she said.

☆ Bank panic created this pocket of opportunity with yields nearing 8%, analysts say
▼ + stars: | 2023-04-06 | by ( Weizhen Tan | ) www.cnbc.com time to read: +4 min

Recent banking turmoil in the U.S. and Europe has been a source of panic, but analysts are pointing to a pocket of opportunity: the preferred shares of the big banks. She said yields on the preferred stocks of the big banks are near 10-year highs. Preferred stocks have characteristics of both stocks and bonds — they trade on exchanges like stocks but they have a face value and pay dividends like bonds. Go big Gilbert said she would focus on preferred shares of the United States' big, national banks instead of its regional ones. How to invest There are many funds dedicated to preferred shares, as well as those that offer preferred shares as part of a larger fixed income allocation, according to Citi.

[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.

☆ What Are AT1 Bonds, and Why Are They Risky?
▼ + stars: | 2023-03-25 | by ( Alana Pipe | Nate Rattner | ) www.wsj.com time to read: 1 min

Swiss regulators announced on March 19 a wipeout of more than $17 billion of Credit Suisse Group AG’s additional Tier 1 bonds, or AT1s, shocking investors as shareholders were paid out before some bondholders. AT1 bonds deliver higher yields than many comparable assets, which makes them attractive to investors willing to take the risk. AT1 bonds are popular among European banks as a way to build up safety buffers. Following the 2008 financial crisis, many countries in Europe signed on to a regulatory framework called Basel III, under which they passed laws requiring large banks to maintain a financial cushion for protection during a downturn.

☆ 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.

☆ European banks default-risk indicator jumps, AT1 bonds fall
▼ + stars: | 2023-03-24 | by ( ) www.reuters.com time to read: +2 min

Deutsche Bank's (DBKGn.DE) five-year credit default swaps (CDS) jumped 19 basis points (bps) from Thursday's close to 222 bps, data from S&P Global Market Intelligence showed. UBS's (UBSG.S) five-year CDS also shot up 14 bps from Thursday's close to 130 bps, the data showed. European banks' Additional Tier 1 (AT1) debt also came under fresh selling pressure, with Deutsche and UBS AT1s down around four and two cents in price, respectively, according to Tradeweb data. Although European regulators and authorities in Asia have said this week they would continue to impose losses on shareholders before bondholders - unlike the treatment of bondholders at Credit Suisse - unease lingers. Reporting by Chiara Elisei and Amanda Cooper; Writing by Dhara Ranasinghe; Editing by Susan FentonOur Standards: The Thomson Reuters Trust Principles.

SummarySummary Companies European banks, bonds, CDS sell offDeutsche Bank CDS rise to highest since late 2018Confidence hurt, outlook dimsLONDON, March 24 (Reuters) - Confidence in European banks deteriorated further on Friday, with the cost of insuring against a debt default rising sharply as the profit outlook for the sector dimmed. Deutsche Bank's (DBKGn.DE) five-year credit default swaps (CDS) jumped 19 basis points (bps) from Thursday's close to 222 bps, rising to their highest since late 2018, data from S&P Global Market Intelligence showed. The prospect that interest rates may be close to peaking, as financial markets are signalling, would also curb banks' profit margins on lending. BOND WATCHEuropean banks' Additional Tier 1 (AT1) debt came under fresh selling pressure, with Deutsche AT1 prices down 6 cents, according to Tradeweb data. The selloff in AT1s highlighted concerns about rising funding costs for European banks and helped explain why the sector was facing renewed pressure on Friday, analysts said.

☆ Take Five: And let there be calm
▼ + stars: | 2023-03-24 | by ( ) www.reuters.com time to read: +5 min

LONDON, March 23 (Reuters) - At the incredible end to the first quarter for financial markets, rattled by bank turmoil, some stability will be much hoped for in coming days. SNB chief Thomas Jordan reckons the next two weeks will be vital to securing UBS's Credit Suisse takeover. Market cap of US regional banks included in the S&P 500 regional bank index3/ DID YOU SAY AT1? Potential legal action is also possible after Swiss authorities ruled that holders of Credit Suisse AT1 bonds would get nothing in the deal. And U.S. and European banks turmoil show how quickly a crisis can surface, giving Ueda even more reason for caution.

☆ Deutsche Bank shares slide 9% after sudden spike in the cost of insuring against its default
▼ + stars: | 2023-03-24 | by ( Elliot Smith | ) www.cnbc.com time to read: +1 min

A logo stands on display above the headquarters of Deutsche Bank AG at the Aurora Business Park in Moscow, Russia. Deutsche Bank shares fell by more than 9% in early trade on Friday following a spike in credit default swaps on Thursday night, as concerns about the stability of European banks persisted. Credit default swaps — a form of insurance for a company's bondholders against its default — leapt to 173 basis points on Thursday night from 142 basis points the previous day. Deutsche led broad declines for major European banking stocks on Friday, with Commerzbank , Credit Suisse , Societe Generale and UBS all falling more than 5%. After completing a multibillion euro restructure that began in 2019, with the aim of reducing costs and improving profitability, Deutsche Bank has reported 10 straight quarters of profit.

The fresh price falls in Europe came as investors were looking to see how far U.S. authorities would go to shore up the banking sector, particularly fragile regional lenders. REUTERS/Dado Ruvic/Illustration/File Photo 1 2CDS surge on banking sector turmoilUBS CHALLENGESThe global banking sector has been shaking since the sudden collapse this month of SVB and Signature Bank. But the worries spread quickly, and on Sunday UBS (UBSG.S) was rushed into taking over Swiss rival Credit Suisse after it lost the confidence of investors. Separate sources told Reuters that UBS has promised retention packages to Credit Suisse wealth management staff in Asia to stem a talent exodus. Standard Chartered (STAN.L) Chief Executive Bill Winters said on Friday the wipeout of Credit Suisse bondholders had "profound" implications for global bank regulations.

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.

UBS is buying back the bonds at the price at which they were sold rather than at market prices, compensating investors after a sell-off this week. UBS shares and bonds have seesawed this week as investors assess the impact of the Credit Suisse deal. The prices of the bonds UBS is buying back on Wednesday had also tumbled but partially recovered on Tuesday. "The issuer has decided to launch this exercise as a result of a prudent assessment of these recent developments and the issuer's long-term commitment to its credit investors," UBS said in its statement. UBS shares were last down 2.3% at 18.97 Swiss francs ($21.05), having risen as much as 3.6%.

☆ 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."

☆ Credit Suisse Write-Off Upends European Bank Capital Bonds
▼ + stars: | 2023-03-22 | by ( Josh Mitchell | Anna Hirtenstein | ) www.wsj.com time to read: 1 min

Some $17 billion of riskier Credit Suisse bonds were written down to zero as part of its emergency takeover. Switzerland’s move to wipe out $17 billion of Credit Suisse Group AG bonds has prompted investors to reassess a market integral to the safety and resilience of Europe’s banking system. The Credit Suisse bonds that were written down as part of its takeover by UBS Group AG were known as AT1s, or Additional Tier 1 bonds. These instruments exploded in popularity in Europe over the past decade and were seen as a way to build buffers that could protect banks in times of trouble without having to tap taxpayer funds.

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."

☆ Asia banks may face difficulty bolstering capital via AT1s - Citi
▼ + stars: | 2023-03-22 | by ( ) www.reuters.com time to read: +2 min

The challenge will be particularly acute for a large number of smaller banks in Asia more reliant on AT1s compared with Western peers due to tighter regulatory liquidity requirements. AT1 bonds, which can be converted to equity, rank higher than shares in the capital structure of a bank. The write-down to zero at Credit Suisse will produce the largest loss in the $275 billion AT1 market to date. Citi said in its note it expected the Credit Suisse fallout to trigger re-pricing of AT1 across Asian banks' capital structures. "Regulators may tighten capital and liquidity requirements, which may impact smaller banks more," Citi said in the research note.

☆ These 10 funds had over $100 million each in Credit Suisse bonds — which are now worth nothing
▼ + stars: | 2023-03-22 | by ( Ganesh Rao | ) www.cnbc.com time to read: +2 min

A number of funds could be facing over $100 million in losses on their Credit Suisse investments after the lender's forced merger with its rival UBS . The funds face losses on Credit Suisse's additional tier-1 bonds (AT1), according to CNBC Pro analysis, after Swiss regulators deemed them worthless as part of the emergency merger . The Swiss regulator FINMA saw the merger between Credit Suisse and UBS as a trigger event to write down 16 billion Swiss francs ($17 billion) worth of the bonds. The following table shows the funds that held AT1 bonds with a par amount of at least $100 million each as of Mar. About 80 funds run either directly by PIMCO or one of its affiliates, held Credit Suisse AT 1 bonds, according to CNBC's analysis.

☆ The Fed is about to deliver a momentous policy decision. It'll be a choice between keeping the focus on inflation or stemming the banking chaos.
▼ + stars: | 2023-03-22 | by ( Max Adams | ) www.businessinsider.com time to read: +6 min

Powell and the Fed may acknowledge that monetary policy has caused some pain, and even add that more may be coming. What's your prediction for today's Fed decision and what Powell might say about the recent banking tumult? A market analyst says investors need to have some key questions answered by the Fed today. Market watchers should pay attention over whether the central bank sees the SVB collapse and resulting crisis as deflationary. The governor of Florida has proposed legislation to ban a central bank digital currency and has called on like-minded states to do the same.

☆ PIMCO lost $340 mln with Credit Suisse AT1 bonds write-off - source
▼ + stars: | 2023-03-21 | by ( Davide Barbuscia | ) www.reuters.com time to read: +2 min

Credit Suisse's (CSGN.S) Additional Tier 1 (AT1) bonds in PIMCO’s mutual funds had been worth about $340 million on Friday, the source familiar with the matter said. PIMCO's current holdings of Credit Suisse bonds, excluding the AT1 debt, were worth over $4 billion, said the source, who was speaking on condition of anonymity. Some Credit Suisse bonds rallied on Monday after the state-backed rescue of the embattled lender. AT1 bonds issued by other European banks, instead, fell sharply on Monday as the treatment of Credit Suisse AT1 bondholders highlighted the risks of investing in these securities. Meanwhile, law firm Quinn Emanuel Urquhart & Sullivan said it was talking to a number of Credit Suisse AT1 holders about possible legal action.

Search resuls for: "AT1s"

25 mentions found