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Quick Take
- As UBS bought out Credit Suisse for $3.2 billion yesterday, stocks head lower in pre-market moves.
- This is a 73% discount on Friday on Credit Suisse’s closing price.
- The biggest losers of this trade were the holders of Additional Tier 1 (AT1) bonds. This a debt instrument where holders are repaid before shareholders.
- But that didn’t happen as Credit Suisse confirmed shareholders would get $3 billion, and $17 billion of AT1 holders would get nothing.
- In a Bloomberg article.”Wiping out AT1 holders while paying substantial amounts to shareholders goes against all the international resolution principles and rules agreed upon after 2008.”
- Could other countries repeat the same as what the Swiss government did?
Pre Market Moves
- UBS: -4%
- Credit Suisse: -7%
- First Republic: -33%
- Deutsche Bank: -2%
At1 Holders: (Source: Financial Times)
The post Rules For Thee but Not for Me: Holders of AT1 Credit Suisse bonds get nothing as shareholders get billions appeared first on CryptoSlate.
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The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.