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UBS to buy Credit Suisse for $3 billion ... This is a taxpayer-backed bailout<<UBS To Buy CS For $3 Billion As AT1 Bonds Get Wiped Out In Record Bail-In; Swiss Govt Grants CHF9BN Guarantee; SNB Offers $100 Billion Liquidity Backstop BY TYLER DURDEN MONDAY, MAR 20, 2023 - 08:11 AM Update (1500ET): We finally have a deal, and what was at first a CHF1 BN acquisition priceof [sic] Credit Suisse by UBS, which then rose to CHF 2 BN, has now cranked up one final time to CHF 3BN (US$3.25 billion), or 0.76 per share, specifically shareholders of Credit Suisse will receive 1 share in UBS for 22.48 shares in Credit Suisse. As part of the deal, the Swiss National Bank is offering a 100 billion-franc liquidity assistance to UBS while the government is granting a 9 billion-franc guarantee for potential losses from assets UBS is taking over, i.e., this is a taxpayer-backed bailout. More importantly, however, the bank's entire AT1 tranche - some CHF16BN of Additioanal [sic] Tier 1 (AT1) bonds, a $275BN market - will be bailed in and written down to zero, to wit: "FINMA has determined that Credit Suisse’s Additional Tier 1 Capital (deriving from the issuance of Tier 1 Capital Notes) in the aggregate nominal amount of approximately CHF 16 billion will be written off to zero." . . . . Here is the full press release from Credit Suisse with final terms of the deal: . . . . The transaction is not subject to shareholder approval. UBS has obtained pre-agreement from FINMA, Swiss National Bank, Swiss Federal Department of Finance and other core regulators on the timely approval of the transaction. . . . .>> https://www.zerohedge.com/markets/ubs-offers-buy-credit-suisse-1bn-025-share-takeunder-cs-balks-offer |
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