David Benamou, chief investment officer at Axiom and Credit Suisse AT1 bondholder, discusses the controversial decision by Swiss authorities to write down $17 billion of AT1s as part of the bank’s emergency sale to UBS.
Decision to wipe out Credit Suisse bonds ‘most likely’ politically motivated, bondholder says
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If this was some developing country all these Anglo Saxon guys would be what a banana republic of a country which doesn’t even follow rule of law. But because of tye facts its a bunch of nazi collaborators who came up with this garbage plan its completely okay
I own bitcoins,
I keep them on a ledger,
No one can take them,
There’s no creditor table to debate about.
I will buy more bitcoins.
replace bitcoins in your text with tulips or any other hard asset.
Saying middle eastern money is the reason is ridiculous since Qatar is one of the largest holders of AT1 bonds
I hope they suffer even more.
Jai Hinduja. Bonds are no longer risk free instruments.
They never were
Boom!
Its because finance is based only confidence and Yabber blabber
Obviously lost money coz he invested it mindlessly,now wants govt to bail him out with taxpayer money too,why shld common ppl pay for ur stupidity
Right, it couldn’t because of anything else other than politically motivated.
oh, hedge funds or qatar lost money and normal people should care …
FINMA is financially illiterate 😂
“No need to worry…you shouldn’t worry…” Janet Yellen 2023
The US wanted to punish the Saudis, because China brokered a peace deal between them an the Iranians.
It’s when bondholders don’t lose money it’s politically motivated. It’s called a government bailout. If people buy bonds and the company can’t pay the bondholders should lose thier money. Not the taxpayer.
Not officially wiped out but if these bonds got very little values if bondholders decided to exit now. I think that was probably one angle why they got bypassed. Imagine if SNB decided to wind down before taking over then the outcome would be the same but the bond got officially wiped out. This deal was quickest from Swiss Government view
They won’t go anywhere with their legal action in CH
Swiss authority and UBS and CS sat behind the close door, and took selfish decision. Put Swiss interest in the center, and screw international share holder and bond investors. Imagine some of these people may hold CS shares but not AT-1 bond, they manipulated the priority, and move the shares above bond, this is a serious conflict of interest in such conduct
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Believing in money is foolishness.
KARMA WILL HIT U BACK FOR WRITING IT TO ZERO for AT1 BONDS OF CS. MANY OF THE INNOCENT BOND HOLDERS PUT IN TRUST IN CS WITH LIFE SAVINGS JUST TO BE WIPE LIKE THAT IS NOT FAIR.
Stop drinking Nescafe
They also stole from the shareholders of CS and gave them a horrible Price ! Around 4 USD per CS-share would have been fair value… For UBS it is a steal !
This is 100% not political motivated. This would be pretty much impossible how the government is structured in Switzerland.
I agree. If you let Saudis convert AT1 to equity it would take over CS which a European bank at a cheap bargain and stab Christianity in its heart of Europe.
Turns out reading the prospectus helps, even if you are a big investor.
The prospectus very clearly states that the notes will be written down to zero in case of a “viability event”, and not converted to shares.
And nowhere in the definition of viability event does it saw that shares have to be wiped out first. Fine print matters, people.
Investors have been scammed… By Swiss Authority
All bank bonds is junk..
AT-1 Bond is garbage, because any law can be changed at convenience. clean them out of your portfolio before is too late.
I am really worried about the current bank crisis. If a bank as big as Credit Suisse could fail, I fear for a lot more. I know a friend who is running a high-growth startup, and was badly hit by the bank run. I have pulled out more than $340k from my bank. After all, the FDIC covers only up to$250,000, and the implosion could have bad effect. Looking to invest into the stock market now. Does anyone know how I could go about it?
I have learned to not trust corporations. I was badly hit by the ’08 financial crisis. Since 2019, I’ve just been focused on investing through a financial advisor, and it has been paying off, and I’m never going back to banks full time.
@Lowcostfresh 2266 This sounds really interesting. I’ve been thinking of pulling out my money too. Could you recommend who your advisor is? I could really use some help.
@Tom D Oh, I’m not really in the business of giving financial advisor, so you are responsible for your decisions. But I have been working with Nicole Joi Anderson , so you could check her out and contact her, if you want.
@Lowcostfresh 2266 Anderson really seems to know her stuff. I found her online-page, read through her resume, educational background, qualifications and it was really impressive. She is a fiduciary who will act in my best interest. So, I booked a session with her.
Use your cash more, avoid the banks. And if you can, use gold, avoid the cash.
dont touch AT1 bond or COCO bond, because they get wiped out before common. nut right? absolutely, clean them out of your portfolio before is too late. or it is just swiss credit market thing.
More rich are gambling with shares go lost and more politicians with political shares become rich – 😢
He’s obviously going to say that as bondholder. But what this shows is how the people we trust and think are super competent are really not that clever. Prospectus clearly allowed for write-down. In the context of a liquidation I could understand the argument of the AT1s being paid before equity (and that should be the case). But in the context of a resolution and what is ultimately an M&A deal AT1s could clearly be wiped out.
Ultimately the issue boils down to whether the conditions for a Viability Event under the Prospectus were triggered.
Global boycott of swiss nestle products….