The issue of Credit Suisse AT1 bonds was aimed at strengthening the level of solvency without issuing new shares (files). KEYSTONE/MICHAEL BUHOLZER sda-ats
This content was published on March 22, 2023 – 03:33
minutes
(Keystone-ATS)
The French asset management companies Lazard Frères Gestion and the American Pimco suffered losses of 141 million and 314 million francs in the takeover of Credit Suisse by UBS. The operation caused the cancellation of certain debt securities.
The operation indeed led to the cancellation of 17 billion dollars (15.7 billion francs) of so-called “CoCo” debt securities (for “Contingent Convertible”), also called “Additional Tier 1” or “AT1 “, held by professional investors (banks, funds).
As of March 14, at the start of the Credit Suisse debacle and strong fears of bankruptcy, Lazard Frères Gestion held a total of 142 million euros of these securities, according to a statement sent to AFP by the company on Tuesday. This represents only 0.4% of the total assets managed by the subsidiary of the Franco-American investment bank Lazard.
Last Position
The American company Pimco, a subsidiary of the German insurer Allianz, for its part lost around 340 million dollars in this case, a source close to the company said on Tuesday.
Pimco originally held Credit Suisse AT1 bonds, which were worth $807 million when they were issued, but their value had fallen in recent months, the source said. That made it the biggest holder of Credit Suisse AT1 bonds according to data from financial news agency Bloomberg. It is, however, a tiny share in the middle of the 1740 billion dollars managed by Pimco.
Created after the 2008 financial crisis, this category of debt, which comes last in the order of priority for reimbursement in the event of financial difficulties, aimed to strengthen the level of solvency without issuing new shares and, thus, to avoid that the taxpayer does not end up footing the bill in the event of a bailout.