Credit Suisse Group Chairman Axel Lehmann (left) and UBS Chairman Colm Kelleher attended the M&A press conference.

(Bloomberg)

[Financial Channel/Comprehensive Report] After Credit Suisse was confirmed to be acquired by UBS, the Swiss Financial Market Supervisory Authority (FINMA) wrote down Credit Suisse’s additional tier 1 capital (AT1) bonds worth about 16 billion Swiss francs to zero and became European AT1 The largest bond write-down event in the market, the explosion of investor sentiment and the shock of the bond market triggered a record decline in the primary bonds of some Asian banks. The price of perpetual US dollar notes with a coupon rate of 5.825% by the Bank of East Asia in Hong Kong fell 8.6 cents to 79.7 cents. Thailand's Kasikornbank Pcl's 4 percent perpetual notes fell 4.3 cents to 79.8 cents, a near-record drop.

In order to avoid the global spread of the disaster, Credit Suisse quickly sold it to UBS for 3 billion Swiss francs, and also caused about 16 billion Swiss francs of Credit Suisse's additional tier 1 capital (AT1) bonds to become wallpapers.

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Credit Suisse’s 16 billion Swiss francs full write-down of AT1 became the largest bond write-down event in the European AT1 market. Deutsche Bank (Banco Santander, SA) acquisition.

A full writedown on Credit Suisse's AT1 bonds triggered record falls in some Asian banks' primary bonds.

BEA's 5.825 percent perpetual dollar notes fell 8.6 cents to 79.7 cents this morning, according to data compiled by Bloomberg.

Thailand's Kasikornbank Pcl perpetual notes with a 4% coupon also fell 4.3 cents to 79.8 cents, also on track for their biggest drop on record.

HSBC's new AT1 bond was down more than 5 cents.

Dickie Wong, head of research at Kingston Equities, said that to be sure, the Credit Suisse deal will have a knock-on effect on bond and equity markets, and we don't yet know how risky international and regional banks are.

Vital Knowledge said in a report that while UBS' agreement to buy Credit Suisse would make the overall financial system stronger and more stable, the cancellation of AT1 bonds could "spook investors who hold such bonds from other banks."

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