Credit Suisse bondholders face risk of permanent destruction as UBS takes over.
TL;DR
Goldman Sachs strategist Lotfi Karoui said that the decision by Swiss authorities to write down Credit Suisse's Additional Tier 1 (AT1) bonds to zero could lead to a "potential permanent destruction in demand" for this type of debt in the long term. However, the risk of contagion across credit markets is limited due to the relative niche nature of the asset class. AT1 bonds issued by other European banks fell sharply on Monday as the treatment of Credit Suisse AT1 bondholders highlighted the risks of investing in this type of debt.
Topics:businessfinance#at1-bonds#credit-suisse#european-banks#finance#financial-distress#goldman-sachs
- Goldman Sachs sees risk of 'permanent destruction' in demand for AT1 bonds Reuters.com
- The $17 billion wipeout of Credit Suisse bondholders has not gone down well in Europe CNBC
- Central banks race to calm markets after UBS takes over Credit Suisse | DW News DW News
- UBS Got Credit Suisse for Almost Nothing Bloomberg
- Opinion | Banking crisis might not be over with Credit Suisse sale The Washington Post
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