[JumpCrisscross]

Bondholders in an otherwise well-capitalised bank being wiped will be interesting. It makes sense. But it also means you should dump bank debt, even if the bank is safe, if they’re vulnerable to idiot Saudis mouthing off.

[blitzar]

This changes the maths on the pricing of a lot of the bank bonds - CS had $17bn worth ... and a market cap of only 10bn a few months ago.

https://www.reuters.com/business/finance/credit-suisse-write...

[mnadkvlb]

This is what blows my mind, i did not expect that. Normally would have expected to get the last crumbs to stockholders. This whole spiel honestly feels super rushed and done in panic.

Of course, I can't blame anyone. Its easy for me to say anything chilling on a couch behind a screen. Cant imagine the stress the regulators and board went through to get this out before monday morning to plug the disaster waiting to happen if CS just went belly up blocking businesses and everyone involved with CS.

Lets hope this stops soon.

[JumpCrisscross]

Didn’t think about the inversion in paying off Credit Suisse shareholders. The entire EU CoCo scheme may have just unraveled.

[blitzar]

Cocos should have converted to shares, which would have probably doubled / trebbled / more the float, then the proceeds of the sale disbursed. Either way would have been ~10c in the dollar for all parties? Either way a CoCo is not the same product (from the perspective of a buyer) as it was assumed to be last week.

It does look a bit like they have just done the full cycle of insolvency to bankruptcy to selling off the pieces and distributing the proceeds in a 48 hour window. UBS are (effectively) not buying "Credit Suisse", they are buying the post bankruptcy assets (which somehow had a market cap of ~7bn at the close of market trading and Friday).

Obviously for a to-big-to-fail bank you cant go through all the steps.

[JumpCrisscross]

Does Switzerland not have receivership? The American model of freezing the bank and then dealing with non-depositors later seems such a better model.

[blitzar]

I assume the intention is to reassure the market, but it actually looks like blind panic.