Socio-Economics History Blog

Socio-Economics History Blog

“Like Several Rate Hikes In One Day”: Yields On AT1 Debt Double Overnight After Shock Credit Suisse Wipeout

by mosesman
… yields on a Bloomberg index of AT1s in Europe surged following Credit Suisse Group AG’s controversial wipeout of the risky debt, to an average of 15.4%, although they since eased slightly
  • “Like Several Rate Hikes In One Day”: Yields On AT1 Debt Double Overnight After Shock Credit Suisse Wipeout
    by Tyler Durden, https://www.zerohedge.com/
    In the aftermath of the shocking reversal of the sacrosanct liquidation waterfall priority…
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    … in which Credit Suisse shareholders received CHF3 billion in value even as the bank’s entire Contingent Convertible (Additional Tier 1) junior creditor class was wiped out…
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    … European’s regulators rushed to calm furious investors – who suddenly dreaded their exposure to AT1 bonds at every European bank, which at last count accounted for some $275BN in securities – and assured them that Credit Suisse was a unique case and that it wouldn’t repeat elsewhere if and when more liquidations and bailins had to kick in.
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    They failed. One day after Europe’s panicked response where one official after another lied through their teeth that equity will never again survive a full AT1 wipe out…
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    read more.

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