Credit Suisse (Credit Suisse, hereinafter referred to as Credit Suisse), a large internationally renowned investment bank, originally reported last night that with the support of its largest shareholder, it had rejected UBS's $1 billion acquisition.
However, under the strong promotion of the Swiss government, UBS officially traded 3 billion Swiss francs (approximately 3.25 billion U.S. dollars) in all shares when Swiss President Alain Berset (Alain Berset) personally hosted a press conference early this morning (20th). In addition, the Swiss National Bank will provide UBS with a Liquidity support of 100 billion Swiss francs, and at the same time provide a guarantee of 9 billion Swiss francs for the potential loss of assets taken over by UBS.
According to the Swiss National Bank:
The takeover of Credit Suisse by the UBS Group found a solution to ensure financial stability and protect the Swiss economy in this exceptional situation.
UBS chairman Colm Kelleher said: After the merger, he will reduce the investment banking business of Credit Suisse, which has continued to lose money in recent years, and retain Swiss Universal Bank, which has a better performance under Credit Suisse.
In order to speed up the completion of the acquisition, the Swiss government even plans to amend the country's laws to bypass the shareholder voting process in order to complete the merger as soon as possible, which shows how huge the financial risks involved in Credit Suisse are. At present, including: the European Central Bank, the US Federal Reserve, and the US Treasury Department all expressed that they are happy to see the Swiss authorities' quick action in support of financial stability.
Credit Suisse's CHF16 billion AT1 bond may be canceled in full
Notably, however, Swiss financial regulator Finma said Credit Suisse Tier 1 (AT1) bonds worth about CHF16 billion would be written down to zero to boost the bank's core capital. But this also means that investors who hold related bonds fear losing their money, which has aroused the anger of bond investors, who believe that their rights and interests have been damaged. A banker said:
Such a decision could lead to a "nightmare" for the European bond market, especially given that bondholders suffer more than Credit Suisse shareholders.
And this historic acquisition is equivalent to the successful acquisition of UBS at a price of less than 4% of the market value of Credit Suisse in its heyday. Historical data shows that in 2007, the market value of Credit Suisse reached a peak of about US$87.7 billion, and the latest market value fell to about US$8 billion.
