UBS agreed to acquire Credit Suisse for 3 billion Swiss francs, but the value of the 16 billion Swiss francs "additional tier one capital" (AT1) bonds issued by Credit Suisse will be canceled in full, triggering global financial stocks to continue to fall on Monday.

(European News Agency)

Investors are dissatisfied that repayment should be ranked before shareholders

[Compilation of Lu Yongshan/Comprehensive Report] In order to prevent the further deterioration of the confidence crisis in the global banking system, Swiss Bank (UBS) agreed to buy Credit Suisse (Credit Suisse) from one billion Swiss francs on Sunday night after active negotiations with Swiss regulators. increased to 3 billion Swiss francs (approximately 3.25 billion U.S. dollars, 97.5 billion Taiwan dollars), but the 16 billion Swiss francs (approximately 527.5 billion Taiwan dollars) issued by Credit Suisse "Additional Tier 1 Capital" ( AT1) The bond value will be written off in full, triggering dissatisfaction among investors, and global financial stocks continued to fall on Monday.

UBS will acquire Credit Suisse with 3 billion Swiss francs in stock, the Swiss National Bank will provide 100 billion Swiss francs of liquidity to support UBS, and the Swiss government will provide 9 billion Swiss francs as a guarantee for possible losses after UBS acquires Credit Suisse. UBS Chairman Kelleher (Colm Kelleher) said: "UBS will reduce Credit Suisse's investment banking business and make it consistent with UBS's conservative risk culture." Credit Suisse is expected to cut 9,000 jobs.

Please read on...

Hours after the UBS-Credit Suisse deal, the U.S. Federal Reserve (Fed), the Swiss National Bank, the European Central Bank, the Bank of England and the Bank of Canada announced that starting Monday, the operating frequency of the U.S. dollar swap agreement will be changed from the current weekly to the weekly Daily, and will continue until the end of April, to increase USD liquidity.

The Swiss Financial Market Supervisory Authority (FINMA) stated that the value of the 16 billion Swiss francs AT1 bonds issued by Credit Suisse will be fully canceled to ensure that private investors can share Credit Suisse's problems; AT1 bonds are commonly known as "cocoa bonds" (emergency A type of convertible bond), which belongs to subordinated debt, which means that the repayment sequence will be lower than that of ordinary debt.

The move sparked investor dissatisfaction, arguing that shareholders are the ones who can't get their money back, and AT1 bondholders should be repaid ahead of shareholders, and could throw Europe's $275 billion bank financing market into chaos.

The news caused Hong Kong's Bank of East Asia and Thailand's Kasikorn Bank's AT1 bond prices to plummet on Monday, and the stock prices of Hong Kong-listed HSBC and Standard Chartered both tumbled, dragging down Asian stock markets.

Financial stocks in European and American stock markets are still in shock

European stock markets turned from black to red on Monday, but financial stocks continued to fall, with Société Générale falling one.

6%, Dutch ING Bank fell two.

7%; U.S. stocks were mixed after the opening bell on Monday, but First Republic Bank continued to fall 12%.

Grasp the pulse of the economy with one hand I subscribe to Free Finance Youtube channel

Already added friends, thank you

Welcome to 【Free Finance】

feel good

Already liked it, thank you.

related news