Daily Management Review

Credit Suisse bondholders getting ready to sue the bank


Bondholders of the Swiss bank Credit Suisse are allegedly preparing to sue the institution, according to the CNBC TV channel. The valuation of the $17 billion in AT1 bonds (unsecured perpetual bonds) issued by the bank will probably be written down to zero, according to a statement made last Sunday by the Swiss financial watchdog FINMA.

Wally Gobetz
Wally Gobetz
Analysts expect that holders of Credit Suisse securities will likely receive a payout as a result of UBS purchasing those assets. But compensation is unlikely to be given to bondholders, particularly those of the high-risk AT1 notes.

A number of Credit Suisse bondholders have already said they are prepared to file lawsuits in this respect. A potential start of litigation on behalf of the bank's bondholders has been discussed, according to a statement made by the California law firm Quinn Emanuel Urquhart & Sullivan.

David Benamou, the investment director of Axiom Alternative Investments, which holds AT1 bonds from Credit Suisse, said he is ready to join the case. He believes that other creditors will follow suit.

source: cnbc.com