UBS has agreed to buy Credit Suisse, $CS

UBS has agreed to buy Credit Suisse, $CS.

Credit Suisse, $CS, holders will get 1 UBS share for every 22.48 $CS shares, per Reuters.

Meanwhile, about 16 billion Swiss francs ($17.3 billion) of Credit Suisse, $CS, bonds have become worthless after takeover by UBS, per Bloomberg.

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.

The bank’s shareholders are set to receive 3 billion francs, per Bloomberg.

The bond wipe out is the biggest loss yet for Europe’s $275 billion AT1 market.

“This just makes no sense,” said Patrik Kauffmann, a portfolio manager at Aquila Asset Management AG, said to Bloomberg. “This will be a total blow to the AT1 market. You can quote me on that.”

UBS bought Credit Suisse, $CS, for more than $3 billion.

The Swiss government said it would provide more than $9 billion to backstop some losses that UBS may incur by taking over Credit Suisse. The Swiss National Bank also provided more than $100 billion of liquidity to UBS to help facilitate the deal.

Read more: https://unusualwhales.com/news/16-billion-swiss-francs-17-3-billion-of-credit-suisse-cs-bonds-have-become-worthless-after-takeover-by-ubs