UBS-Credit Suisse merger leads to $17 billion AT1 bond wipeout

The deal exposes the risks associated with the high yield securities and is likely to make bank borrowing through bonds more expensive in the short term.

UBS’ Credit Suisse takeover will lead to the write-off of CHF16 billion ($17.24 billion) worth of Additional Tier 1 (AT1) bonds, following a call on Sunday by Swiss authorities to override the traditional loss-absorbing hierarchy.

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