Credit Suisse bond write-down had no legal basis: Swiss court

Federal Administrative Court cancels write-down of CS bonds Keystone-SDA

The Swiss Federal Administrative Court has cancelled the write-off of AT1 bonds in the takeover of Credit Suisse by UBS in 2023.

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The controversial step carried out by the Swiss Financial Market Supervisory Authority (FINMA) had no legal basis, the court stated.

The origin of the case is the package of measures taken by the Federal Department of Finance, FINMA, the Swiss National Bank and the two banks involved in the rescue operation on March 19, 2023.

+ How AT1 bond “rip-off” could cost Swiss taxpayer

Part of the takeover plan was to write-down Additional Tier 1 capital instruments (AT1 instruments) with a nominal value of around CHF16.5 billion. In a supplement to the emergency ordinance, the Swiss government authorised FINMA to issue the corresponding order.

This was contested by 3,000 complainants in around 360 proceedings. The Federal Administrative Court ruled in their favour in its partial decision and annulled the order.

The court has not yet ruled on the reversal. It is suspending the other proceedings until the cancellation is legally binding.

Translated from German with DeepL/mga

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