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The Economist — Economy — Credit Suisse Coco Bonds — Banking — Investment — Finance

Credit Suisse’s takeover causes turmoil in a $275bn bond market

UBS's purchase of Credit Suisse has caused turmoil in the $275bn Additional-Tier 1 bond market, with the future of the coco asset class uncertain.

1 min read
  • UBS's purchase of Credit Suisse is causing turmoil in the $275bn Additional-Tier 1 bond market.
  • Credit Suisse wrote down around SFr16bn ($17bn) in Additional-Tier 1 (at1) bonds, causing fury among investors.
  • At1 securities are a form of 'contingent-convertible' (coco) bonds, created after the global financial crisis.
  • Credit Suisse's debt-issuance documents seem to allow for stockholders coming out on top, contrary to many buyers' understanding.
  • The future of the asset class is uncertain, with some commentators suggesting the end of the coco market.
Credit Suisse’s takeover causes turmoil in a $275bn bond market
Some even think it could spell the end of the Additional-Tier 1 asset class | Finance & economics
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