UBS today announced the takeover of Credit Suisse. Swiss Federal Department of Finance, the Swiss National Bank and the Swiss Financial Market Supervisory Authority FINMA (FINMA) all came together to facilitate this takeover.
- Credit Suisse has been informed by FINMA that FINMA has determined that Credit Suisse’s Additional Tier 1 Capital (deriving from the issuance of Tier 1 Capital Notes) in the aggregate nominal amount of approximately CHF 16 billion will be written off to zero.
- Credit Suisse and UBS can obtain a liquidity assistance loan with privileged creditor status in bankruptcy for a total amount of up to CHF 100 billion.
- Furthermore, and based on the Federal Council’s Emergency Ordinance, the SNB can grant Credit Suisse a liquidity assistance loan of up to CHF 100 billion backed by a federal default guarantee. The structure of the loan is based on the Public Liquidity Backstop (PLB).
Write off of AT1 bonds sparked a
massive risk aversion across markets in the Asian Session with deep declines
seen across all asset classes and risk haven buying of JPY and USD. US Treasury
yields made fresh lows with 2Y yields and 10Y yields plummeting to lows of
3.63% and 3.29% respectively and USDJPY touching lows of 130.55.
Risk Sentiment is all over the
place.
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