AllianceBernstein intends to sue Switzerland over CS AT1 bonds
Published: Tuesday, Dec 10th 2024, 10:00
Updated At: Wednesday, Dec 11th 2024, 00:59
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The US asset manager AllianceBernstein (AB) apparently wants to sue the Swiss Confederation in connection with the takeover of Credit Suisse by UBS. According to an article in the British "Financial Times", this relates to the so-called AT1 bonds worth 17 billion US dollars, which were declared worthless by the Swiss Financial Market Supervisory Authority Finma during the transaction, resulting in high losses for investors.
AB is preparing to sue Switzerland for 225 million dollars because the government canceled 17 billion dollars in debt when UBS took over CS last year, according to the article, which was published online on Tuesday. The newspaper refers to people familiar with the matter.
Claim value 375 million dollars
AB is to be added as a plaintiff next month in proceedings brought by the law firm Quinn Emanuel Urquhart & Sullivan on behalf of Credit Suisse's bondholders. The asset manager will be the first major institutional investor to join the lawsuit.
The total value of the claim is thus increased to around 375 million dollars. Quinn Emanuel argues that the deal was brokered by the Swiss government and was an unlawful interference with the property rights of investors.
AT1 bonds (AT1) are subordinated bonds that were created in the course of the 2008 financial crisis to protect banks in financial difficulties from collapse. They are counted as part of a bank's core capital and can be converted into equity and partially written off. In March 2023, FINMA declared that the public sector's support for Credit Suisse constituted an event that justified such action. The ruling made waves internationally and triggered many lawsuits and corresponding intentions.
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