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Credit Suisse AT1 Bondholders Sue Switzerland in New York 


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Credit Suisse bondholders with USD 82 million in Additional Tier 1 (AT1) debt have filed a lawsuit against Switzerland, seeking compensation, according to U.S. court filings on Thursday. 

Credit Suisse collapsed in 2023 and was taken over by UBS in a rescue orchestrated by Swiss authorities. 

Image Source: Daily Sabah
Credit Suisse collapsed in 2023 and was taken over by UBS in a rescue orchestrated by Swiss authorities. 
Image Source: Daily Sabah 

Credit Suisse collapsed in 2023 and was subsequently taken over by rival UBS in a rescue orchestrated by Swiss authorities. During this process, the Swiss regulator FINMA wrote down about USD 17 billion of Credit Suisse’s AT1 bonds, causing outrage among bondholders. 

Law firm Quinn Emanuel Urquhart & Sullivan, representing the plaintiffs, confirmed that the lawsuit was filed in the U.S. District Court for the Southern District of New York. 

Switzerland’s finance ministry declined to comment on the matter. 

The AT1 bonds held by the plaintiffs in the suit have a face value of over USD 82 million, according to the filing. 

AT1 bonds, designed to act as a financial cushion if a bank’s capital falls below a certain threshold, have been promoted by regulators since the 2008-09 financial crisis. 

Dennis Hranitzky, head of Quinn Emanuel’s sovereign litigation practice, stated that the lawsuit aims to secure full compensation for the bondholders. “Switzerland unnecessarily destroyed USD 17 billion of AT1 instruments and thereby unlawfully violated the property rights of the holders of these instruments,” Hranitzky said. 

Last week, UBS completed the merger of the main parent companies of UBS and Credit Suisse in Switzerland. 

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