2023-04-16 16:38:14
The Swiss Ministry of Finance has confirmed the filing of two complaints, revealed on Sunday by the weekly Sunday newspaperwithout giving additional information on the proceedings in progress.
Two complaints have been filed against Switzerland by holders of risky Credit Suisse bonds, declared worthless by the authorities during the emergency takeover of the country’s second largest bank by rival UBS, the Swiss Ministry of Foreign Affairs said. finances, confirming information from the weekly Sunday newspaper.
The Federal Department of Finance adds that it is not aware of any other complaints, denunciations or appeals, but specifies that the Confederation knows that investors are studying the possibility of legal proceedings in connection with the takeover of Credit Suisse by UBS.
The Swiss authorities caused a shock wave in the bond world by announcing on March 19 – at the same time as the acquisition of Credit Suisse for only 3 billion Swiss francs – that these Additional Tier 1 (AT1) bonds not only were no longer worth nothing but also that they had decided to favor the shareholders of Credit Suisse rather than the investors who had bought these AT1s for 16 billion Swiss francs (about the same amount in euros).
Financial guarantees
Holders of debt securities generally have priority over shareholders. For the regulatory authority of the Swiss financial markets, the “total amortization” of these securities was planned black on white in the sales prospectus, in particular in a scenario of exceptional public aid.
To convince UBS to take over Credit Suisse, without the number one in the banking sector being able to examine the books of accounts in detail, the federal government and the central bank have given financial guarantees of up to 109 billion francs. Aid, themselves challenged by parliament during a three-day extraordinary session devoted to the subject last week.
The Sunday newspaper estimates, however, that the Confederation could be forced to pay around 8 billion francs in compensation to the holders of these bonds, i.e. their indicative value on March 17.
The weekly indicates that the plaintiffs intend to rely on bilateral investment protection agreements signed with a hundred countries to assert their rights.
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