that Credit Suisse’s additional tier one (AT1) bonds be written down to zero. This decision was greeted with surprise among Credit Suisse bondholders and led to sharp drops in AT1 bonds in other banks. What are AT1 bonds, and why are they important? AT1s are a form of contingent convertible security, or CoCo,

Mar 20, 2023 · The surprise move by the SNB has rattled Europe’s AT1 bond market, with investors now questioning whether their holdings could be obliterated if another bank collapses.

Apr 17, 2023 · If the bank’s common equity tier 1 capital ratio – a measure of its regulatory capital – falls below 7%, then the AT1 is written down to zero: It never needs to be paid back; it just goes away completely. . . . These securities are, basically, a trick.

Mar 20, 2023 · About $17bn in Credit Suisse additional tier 1 (AT1) bonds were wiped out as part of the transfer to UBS, essentially reducing the burden on its new owner and hitting investors who knew they had...

Feb 3, 2025 · AT1 bonds, introduced after the 2008 financial crisis, were designed as a safeguard, allowing banks to raise capital while absorbing losses in times of distress. However, the Credit Suisse debacle revealed fundamental flaws in AT1s, particularly their unpredictable treatment in banking crises.

Mar 14, 2023 · Monday saw a massive selloff in banks’ bonds, with the move most prominent in AT1 perpetuals. This followed the collapse of Silicon Valley Bank (SVB) in the US over the weekend. Among the prominent banks, losses were led …

Mar 30, 2023 · It comes after Swiss regulator FINMA announced earlier this month that Credit Suisse’s additional tier-one (AT1) bonds, widely regarded as relatively risky investments, would be written down to zero, while stock investors would receive over $3 billion as part of the bank’s takeover by UBS, angering bondholders.

Jan 23, 2025 · In the wake of the shock caused by the Swiss Financial Market Supervisory Authority's (Finma) decision to write off Credit Suisse's (CS) Additional Tier-1 bonds (AT1) worth 16 billion francs—a move that triggered a wave of lawsuits still awaiting judicial resolution—the market for subordinated bonds in general, including AT1 (or contingent ...

AT1 bonds have been thrust into the spotlight because of happenings at Credit Suisse. The bank said Sunday that, under orders from the Swiss Financial Market Supervisory Authority, the value of...

Mar 20, 2023 · ETFs providing exposure to Additional Tier 1 (AT1) bonds have come under pressure as a result of stresses in the global banking system following the demise of SVB and Signature in the US and Credit Suisse in Europe. The value of Credit Suisse’s AT1 bonds have been written down to zero.