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It's Created a Windfall Opportunity. One of the biggest upsets from the demise of Credit Suisse in March was the writedown of $17 billion of the 167-year-old bank's bonds. Unusually, these bondholders were not paid ahead of shareholders.
In the meantime, senior Credit Suisse insiders tell us they're hopeful that UBS will acquire Credit Suisse, "hold" the elements that will comprise CS First Boston, and then spin out the unit as planned in 2024.
CHF 16b of Credit Suisse Additional Tier 1 bonds will be wiped after merger with UBS. Tier 2 and Senior bondholders are safe for now from any potential write-down.
As part of the overhaul announced in October, it is seeking to spin off merger advice and leveraged finance into a new entity named Credit Suisse First Boston (CSFB), for which it has been seeking buyers.
The First Boston Corporation was a New York?based bulge bracket investment bank, founded in 1932 and acquired by Credit Suisse in 1988. After the acquisition, it operated as an independent investment bank known as CS First Boston until 2006, when the company was fully integrated into Credit Suisse.
In addition, Michael Klein has been appointed Chief Executive Officer (CEO) of Banking and CEO of the Americas, as well as designated CEO of CS First Boston.
Following the acquisition, Credit Suisse and its American Depositary Shares will be delisted from the SIX Swiss Exchange and New York Stock Exchange, with shareholders receiving one UBS share for every 22.48 Credit Suisse shares held.
Switzerland faced a full-scale bank run if Credit Suisse went bankrupt, Swiss regulator argues. Allowing the bankruptcy of troubled lender Credit Suisse would have crippled Switzerland's economy and financial center and likely resulted in deposit runs at other banks, Swiss regulator FINMA said Wednesday.