ZURICH (Reuters) – Switzerland’s financial market regulator FINMA on Thursday gave more information to explain the complete write-down of AT1 bonds issued by Credit Suisse after the bank’s rescue.
FINMA has instructed Credit Suisse to completely write down its AT1 instruments and to inform the bondholders concerned without delay.
“The AT1 instruments issued by Credit Suisse contractually provide that they will be completely written down in a ‘viability event’, in particular if extraordinary government support is granted,” FINMA said.
“As Credit Suisse received extraordinary liquidity assistance loans secured by a federal default guarantee on 19 March 2023, these contractual conditions were met for the AT1 instruments issued by the bank,” it added.
Tier 2 bonds will not be written down, FINMA said.
(Reporting by John Revill, Editing by Friederike Heine)
