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Credit Suisse rescue plan may include nationalization, bondholder losses

Press Releases Crypto News Cointelegraph Credit Suisse rescue plan may include nationalization, bondholder losses

A rescue plan for Swiss banking giant Credit Suisse may impose losses on its bondholders and even result in a full or partial nationalization of Credit Suisse Group AG, multiple reports revealed on March 19.

Swiss authorities are considering applying losses to Credit Suisse bondholders as part of the bank’s ongoing recovery efforts, Reuters learned from two sources. European regulators are concerned that the move might undermine investor confidence in Europe’s financial sector.

Another report from Bloomberg claims that the Swiss government is analyzing a full or partial nationalization of the bank, the only available alternative if the UBS takeover is not completed. Investment bank UBS is Switzerland’s largest bank.

Can anyone else remember seeing European bank CDS and bonds quoted on a Sunday before? Very surreal!

— Robert Smith (@BondHack) March 19, 2023

On March 18, the Swiss National Bank and Switzerland’s financial regulator said that Credit Suisse’s acquisition by UBS is the “only option” to prevent a “collapse in confidence” in Credit Suisse.

The nationalization would be an emergency option due to the complexities surrounding the deal and the limited time available. Swiss authorities are working over the weekend on “emergency measures” to accelerate the deal before Asian markets open, including allowing the deal to proceed without a shareholder vote.

UBS is reportedly asking the government to shoulder around $6 billion on legal costs and potential future losses in the event of a takeover. UBS is offering $1 billion for Credit Suisse, a considerable discount under the bank’s market value on March 17 of nearly $8 billion, Go to Source to See Full Article
Author: Ana Paula Pereira

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