Latest news with #AT1bonds
Zawya
08-07-2025
- Business
- Zawya
UBS must face US investor litigation over Credit Suisse demise
NEW YORK: UBS must face two lawsuits by investors who said the former Credit Suisse defrauded them prior to its March 2023 demise with false and misleading statements about its financial condition, a U.S. judge ruled on Monday. U.S. District Judge Colleen McMahon in Manhattan said Core Capital Partners may sue on behalf of U.S. purchasers of Credit Suisse Additional Tier 1 bonds, which a Swiss regulator ordered written down to zero as part of UBS' rescue of that bank. McMahon also said U.S. purchasers of Credit Suisse's American depositary shares and several other bond issues may pursue their separate lawsuit, which she refused to dismiss last September, as a group in a class action. She declined to combine the two lawsuits, after Core Capital accused the lead plaintiff in the other case, a New York University engineering professor, of having "abandoned" the AT1 bondholders. UBS declined to comment. Other defendants include Credit Suisse's former chief executive Ulrich Koerner, former chairman Axel Lehmann and former chief financial officer Dixit Joshi. Their lawyers did not immediately respond to requests for comment. AT1 bonds are a capital cushion that can support banks during market turmoil. Though they rank above shares in banks' capital structures, Switzerland's financial regulator FINMA ordered Credit Suisse to write down 16 billion Swiss francs (now about $20 billion) of the bonds, while letting UBS buy that bank for $3 billion. The writedown shocked investors and prompted many lawsuits in the United States and Europe. In seeking a dismissal of Core Capital's lawsuit, the defendants said the FINMA-ordered writedown, not any alleged fraudulent misstatements, caused the bondholder losses. But the judge found it plausible that disclosures of the defendants' alleged fraud caused the value of the AT1 bonds to decline, "ultimately culminating in the eventual write-down of all Credit Suisse AT1 bonds to a value of zero." In February 2024, McMahon dismissed a separate U.S. investor lawsuit blaming two decades of "continuous mismanagement" for Credit Suisse's collapse. (Reporting by Jonathan Stempel in New York; Editing by Stephen Coates)
Reuters
07-07-2025
- Business
- Reuters
UBS must face US investor litigation over Credit Suisse demise
NEW YORK, July 7 (Reuters) - UBS (UBSG.S), opens new tab must face two lawsuits by investors who said the former Credit Suisse defrauded them prior to its March 2023 demise with false and misleading statements about its financial condition, a U.S. judge ruled on Monday. U.S. District Judge Colleen McMahon in Manhattan said Core Capital Partners may sue on behalf of U.S. purchasers of Credit Suisse Additional Tier 1 bonds, which a Swiss regulator ordered written down to zero as part of UBS' rescue of that bank. McMahon also said U.S. purchasers of Credit Suisse's American depositary shares and several other bond issues may pursue their separate lawsuit, which she refused to dismiss last September, as a group in a class action. She declined to combine the two lawsuits, after Core Capital accused the lead plaintiff in the other case, a New York University engineering professor, of having "abandoned" the AT1 bondholders. UBS declined to comment. Other defendants include Credit Suisse's former chief executive Ulrich Koerner, former chairman Axel Lehmann and former chief financial officer Dixit Joshi. Their lawyers did not immediately respond to requests for comment. AT1 bonds are a capital cushion that can support banks during market turmoil. Though they rank above shares in banks' capital structures, Switzerland's financial regulator FINMA ordered Credit Suisse to write down 16 billion Swiss francs (now about $20 billion) of the bonds, while letting UBS buy that bank for $3 billion. The writedown shocked investors and prompted many lawsuits in the United States and Europe. In seeking a dismissal of Core Capital's lawsuit, the defendants said the FINMA-ordered writedown, not any alleged fraudulent misstatements, caused the bondholder losses. But the judge found it plausible that disclosures of the defendants' alleged fraud caused the value of the AT1 bonds to decline, "ultimately culminating in the eventual write-down of all Credit Suisse AT1 bonds to a value of zero." In February 2024, McMahon dismissed a separate U.S. investor lawsuit blaming two decades of "continuous mismanagement" for Credit Suisse's collapse.
Yahoo
07-07-2025
- Business
- Yahoo
UBS must face US investor litigation over Credit Suisse demise
By Jonathan Stempel NEW YORK (Reuters) -UBS must face two lawsuits by investors who said the former Credit Suisse defrauded them prior to its March 2023 demise with false and misleading statements about its financial condition, a U.S. judge ruled on Monday. U.S. District Judge Colleen McMahon in Manhattan said Core Capital Partners may sue on behalf of U.S. purchasers of Credit Suisse Additional Tier 1 bonds, which a Swiss regulator ordered written down to zero as part of UBS' rescue of that bank. McMahon also said U.S. purchasers of Credit Suisse's American depositary shares and several other bond issues may pursue their separate lawsuit, which she refused to dismiss last September, as a group in a class action. She declined to combine the two lawsuits, after Core Capital accused the lead plaintiff in the other case, a New York University engineering professor, of having "abandoned" the AT1 bondholders. UBS declined to comment. Other defendants include Credit Suisse's former chief executive Ulrich Koerner, former chairman Axel Lehmann and former chief financial officer Dixit Joshi. Their lawyers did not immediately respond to requests for comment. AT1 bonds are a capital cushion that can support banks during market turmoil. Though they rank above shares in banks' capital structures, Switzerland's financial regulator FINMA ordered Credit Suisse to write down 16 billion Swiss francs (now about $20 billion) of the bonds, while letting UBS buy that bank for $3 billion. The writedown shocked investors and prompted many lawsuits in the United States and Europe. In seeking a dismissal of Core Capital's lawsuit, the defendants said the FINMA-ordered writedown, not any alleged fraudulent misstatements, caused the bondholder losses. But the judge found it plausible that disclosures of the defendants' alleged fraud caused the value of the AT1 bonds to decline, "ultimately culminating in the eventual write-down of all Credit Suisse AT1 bonds to a value of zero." In February 2024, McMahon dismissed a separate U.S. investor lawsuit blaming two decades of "continuous mismanagement" for Credit Suisse's collapse. Sign in to access your portfolio
Yahoo
07-07-2025
- Business
- Yahoo
UBS must face US investor litigation over Credit Suisse demise
By Jonathan Stempel NEW YORK (Reuters) -UBS must face two lawsuits by investors who said the former Credit Suisse defrauded them prior to its March 2023 demise with false and misleading statements about its financial condition, a U.S. judge ruled on Monday. U.S. District Judge Colleen McMahon in Manhattan said Core Capital Partners may sue on behalf of U.S. purchasers of Credit Suisse Additional Tier 1 bonds, which a Swiss regulator ordered written down to zero as part of UBS' rescue of that bank. McMahon also said U.S. purchasers of Credit Suisse's American depositary shares and several other bond issues may pursue their separate lawsuit, which she refused to dismiss last September, as a group in a class action. She declined to combine the two lawsuits, after Core Capital accused the lead plaintiff in the other case, a New York University engineering professor, of having "abandoned" the AT1 bondholders. UBS declined to comment. Other defendants include Credit Suisse's former chief executive Ulrich Koerner, former chairman Axel Lehmann and former chief financial officer Dixit Joshi. Their lawyers did not immediately respond to requests for comment. AT1 bonds are a capital cushion that can support banks during market turmoil. Though they rank above shares in banks' capital structures, Switzerland's financial regulator FINMA ordered Credit Suisse to write down 16 billion Swiss francs (now about $20 billion) of the bonds, while letting UBS buy that bank for $3 billion. The writedown shocked investors and prompted many lawsuits in the United States and Europe. In seeking a dismissal of Core Capital's lawsuit, the defendants said the FINMA-ordered writedown, not any alleged fraudulent misstatements, caused the bondholder losses. But the judge found it plausible that disclosures of the defendants' alleged fraud caused the value of the AT1 bonds to decline, "ultimately culminating in the eventual write-down of all Credit Suisse AT1 bonds to a value of zero." In February 2024, McMahon dismissed a separate U.S. investor lawsuit blaming two decades of "continuous mismanagement" for Credit Suisse's collapse.
Reuters
06-06-2025
- Business
- Reuters
UBS faces tough new Swiss banking sector rules
BERN, June 6 (Reuters) - The Swiss government on Friday proposed stricter rules for UBS (UBSG.S), opens new tab following its takeover of Credit Suisse, which could make it hold $26 billion more in core capital, confirming some of the bank's worst fears about incoming new regulations. The key proposal, which the bank would have six to eight years to prepare for after it became law, is that UBS must fully capitalise its foreign units, confirming what many analysts, lawmakers and executives had been expecting. The government said its capital requirement proposal would allow UBS to reduce its holding of Additional Tier 1 (AT1) bonds by $8 billion. Today, UBS must only 60% capitalise its foreign units and can cover some of the capital with AT1 debt. UBS executives say the additional capital burden will put the Zurich-based bank at a disadvantage to rivals and undermine the competitiveness of Switzerland as a financial centre. Shares in the bank rose after the government unveiled the proposals on Friday afternoon, climbing by more than 6%. Such was the shock in Switzerland over the 2023 collapse of Credit Suisse that top politicians led by Finance Minister Karin Keller-Sutter vowed to introduce more robust rules that would protect taxpayers and prevent another meltdown in future. Keller-Sutter now holds Switzerland's rotating one-year presidency and Friday's announcement will start a long period of political wrangling over the measures, which the governing federal council called "targeted and proportionate." "They strengthen trust in the financial centre, which, in the view of the federal council, is central to its stability and competitiveness," the council said in a statement. A parliamentary inquiry last year noted that since UBS bought Credit Suisse for 3 billion Swiss francs ($3.65 billion) in March 2023, it has had a balance sheet bigger than the Swiss economy, and urged the government to take the foreign units into account. The federal council said it would present drafts on the proposals for consultations with stakeholders in the second half of 2025. Finance Ministry officials say laws requiring parliamentary approval will not enter force before 2028. Separate measures known as ordinances that can be issued directly by the government could apply from the start of 2027. A six to eight-year transition period looked appropriate for UBS to meet new rules on capitalising foreign units from when they come into force, the government said. That could give the bank until the mid-2030s to comply. UBS's shares have lagged European peers in anticipation of the tougher rules and sources inside the bank have warned the new regulations could make it an appealing takeover target. Under the Swiss proposals, UBS's Common Equity Tier 1 (CET1) capital ratio could end up somewhat higher than those of global rivals, the government said. UBS's CET1 ratio of 14.3% could rise up to 17%, above rivals like JPMorgan (JPM.N), opens new tab at 15.8%, Morgan Stanley (MS.N), opens new tab at 15.7%, and 15.3% at Goldman Sachs, it said. Shares in UBS rose more than 60% in the 12 months following its acquisition of Credit Suisse. But the stock has since sharply underperformed; UBS shares have lost about 5% in the past year, while a top European banking index (.SX7P), opens new tab climbed 37%. Analysts say the new regulations could trigger a rejig of UBS's business model, which now focuses on growth in the United States and Asia. To take the edge off the rules, the bank may be tempted to sell some assets, banking experts say. The Swiss government also set out piecemeal reforms to bolster the market regulator FINMA, which was heavily criticised for its response to the Credit Suisse collapse. These include measures aimed at holding bankers to account, giving the regulator the power to impose fines and making it easier to restrain pay and claw back bonuses. Still, the proposals come years after the European Union introduced similar measures in the wake of the 2007-2009 financial crisis. The government also proposed making it easier for banks to access liquidity from the Swiss National Bank. Barriers to transferring collateral to the SNB will also be removed. ($1 = 0.8222 Swiss francs)
