by Bernhard at Moon of Alabama
“Only when the tide goes out do you discover who’s been swimming naked.”
- Credit Suisse Bonds Gain in a Weekend Trading Session – Mar 18, 8:21 UTC – Bloomberg/Yahoo
One large dealer was quoting Credit Suisse bonds at levels that were as much as 6.5 points higher than Friday, according to a person with knowledge of the matter, who asked not to be identified discussing private activity in the over-the-counter market.
- Credit Suisse says $17 billion of its debt now worthless, angering bondholders – Mar 19, 20:46 UTC – Reuters/Yahoo
Holders of Credit Suisse Group AG bonds suffered a historic loss when a takeover by UBS Group AG wiped out about 16 billion Swiss francs ($17.3 billion) worth of risky notes.The deal will trigger a “complete write-down” of the bank’s additional tier 1 bonds in order to increase core capital, Swiss financial regulator FINMA said in a statement on its website. Meanwhile, the bank’s shareholders are set to receive 3 billion francs.
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Pacific Investment Management Co., Invesco Ltd. and BlueBay Funds Management Co. SA were among the many asset managers holding Credit Suisse AT1 notes, according to data compiled by Bloomberg. Their holdings may have changed or been sold entirely since their last regulatory filings.
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AT1 bonds were introduced in Europe after the global financial crisis to serve as shock absorbers when banks start to fail. They are designed to impose permanent losses on bondholders or be converted into equity if a bank’s capital ratios fall below a predetermined level, effectively propping up its balance sheet and allowing it to stay in business.
- HSBC Tumbles in Hong Kong as AT1 Debt Selloff Weighs on Banks – Mar 20, 5:01 UTC – Bloomberg/Yahoo
HSBC Holdings Plc fell as much as 6.6% in Hong Kong trading, the biggest drop in nearly six months, with its newly issued AT1 bond declining more than 5 cents. Standard Chartered Plc slid as much as 5.6%.The complete write-down of Credit Suisse’s AT1 debt as part of a Swiss bailout has investors in the $275 billion market scrambling to determine how much protection the notes offer in a crisis.
- Investors dump Credit Suisse stock and bonds after UBS rescue – Mar 20, 7:18 UTC – Bloomberg/Yahoo
A $1 billion AT1 bond with a coupon of 4.5% was bid as low as 1 cent on the dollar, Tradeweb pricing showed.
- Stocks plunge despite Credit Suisse buyout, central banks’ pledge – Mar 20, 8:32 UTC – AFP/Yahoo
Continue ReadingHong Kong plummeted 2.7 percent, with heavyweight HSBC off nearly six percent on worries about its exposure to risky bonds related to Credit Suisse. Standard Chartered also sank.The losses came even as the city’s de facto central bank said its banking sector had “insignificant” exposure to Credit Suisse.
Other regional bank shares were also hit, including Japan’s Mitsubishi UFJ Financial, National Australia Bank and India’s ICICI.
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London, Frankfurt and Paris all fell in early Monday trade.Tokyo, Sydney, Seoul and Mumbai were also in the red.
Shanghai rose after the Chinese central bank cut the amount of cash banks must keep in reserve, hoping to boost the country’s economy…