ARTICLE · 27 MARCH 2024

Trade Alert: Switzerland

Brown Rudnick LLP

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In the twelve months prior to the UBS takeover, Credit Suisse had lost 75% of its value with $75 billion of customer deposits lost in the first quarter of 2023...

SwitzerlandTax

ONE YEAR ON: The $17B Write Down of the Credit Suisse AT1 Bonds

In the twelve months prior to the UBS takeover, Credit Suisse had lost 75% of its value with $75 billion of customer deposits lost in the first quarter of 2023 and was heading towards collapse in what would have been one of the largest banking failures since the fall of Lehman Brothers in 2008. Swiss National Bank Chairman, Thomas Jordan, explained that if UBS and the Swiss state had not stepped in, "Credit Suisse would have failed, with extreme consequences for Switzerland but also the global economy".

As part of the UBS takeover, FINMA (the Swiss Financial Market Supervisory Authority) ordered Credit Suisse to write down in full all Additional Tier 1 capital instruments ("CS AT1 Bonds") with a combined value of around $17.3 billion (the "Write-Down"), making this the largest loss in the $275 billion AT1 bond debt market to date, as reported by Reuters.

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