Two complaints have been filed against Switzerland by holders of Credit Suisse risky bonds, declared worthless by authorities during the emergency takeover of the country’s second-biggest bank by rival UBS, the Ministry of Finance said. Finance of Switzerland, confirming information from the weekly. SonntagsZeitung.
The Federal Department of Finance adds that it is not aware of any other complaints, complaints or appeals, but specifies that the Confederation is aware that investors are considering legal action in connection with UBS’s acquisition of Credit Suisse.
The Swiss authorities shocked the bond world by announcing on March 19, at the same time as the acquisition of Credit Suisse for just 3 billion Swiss francs, that these additional Tier 1 (AT1) bonds will not only no longer they were worth nothing but also that they had decided to favor Credit Suisse shareholders rather than the investors who had bought these AT1s for 16 billion Swiss francs (roughly the same amount in euros).
financial guarantees
Holders of debt securities generally have priority over shareholders. For the Swiss financial markets regulatory authority, the “full redemption” of these securities was provided for in black and white in the sales prospectus, particularly in a scenario of exceptional public aid.
To convince UBS to take over Credit Suisse, without the number one in the banking sector being able to examine the books in detail, the federal government and the central bank have provided financial guarantees of up to 109 billion francs. Ayuda, themselves questioned by parliament during an extraordinary three-day session devoted to the issue last week.
There SonntagsZeitung estimates, however, that the Confederation could be forced to pay around 8 billion francs in compensation to the holders of these bonds, that is, their indicative value on March 17.
The weekly indicates that the plaintiffs intend to use bilateral investment protection agreements signed with a hundred countries to assert their rights.
Source: BFM TV
