On Thursday, additional details were provided by Switzerland’s financial market regulator FINMA to further explain the full write-down of AT1 bonds issued by Credit Suisse (CSGN.S) following the bank’s rescue.
Credit Suisse has been given the go-ahead by FINMA to fully write down its AT1 instruments and immediately notify the affected bondholders.
According to the contracts for the AT1 instruments issued by Credit Suisse, they will be fully written down in a “viability event,” particularly if extraordinary government support is given, FINMA reported.
“These contractual conditions were satisfied for the AT1 instruments issued by the bank,” it continued, “as Credit Suisse received extraordinary liquidity assistance loans secured by a federal default guarantee on March 19, 2023.”
According to FINMA, Tier 2 bonds won’t be noted down.