Japan Creditors Set To Challenge Credit Suisse AT1 Write Down

Date

5/22/2023 4:13:16 AM

(MENAFN- Swissinfo) Credit Suisse: once a pillar of the country. © Keystone / Michael Buholzer

A Japanese law firm is the latest to take aim at Swiss authorities over the decision to write down the value of AT1 bonds as part of the UBS takeover of Credit Suisse.

This content was published on May 22, 2023 May 22, 2023 Keystone-SDA/dos

The NZZ am Sonntag newspaper reportsexternal link that law firm Masuda & Partners is gathering Japan-based holders of Additional Tier 1 (AT1) bonds to submit an application for international arbitration.

The firm wants to register all those keen to participate by the end of May, the newspaper writes.

+ read more: singapore-based creditors also planning case

Lawyers apparently want to base their case on a violation of an investment protection agreement between Switzerland and Japan.

Such international agreements are intended to offer foreigners legal protection for direct investments in the other country. In a dispute, investors could complain directly to an international arbitration board, writes the NZZ am Sonntag.

The paper says the majority of foreign creditors whose home country has concluded an investment protection agreement with Switzerland are likely to take part in such a case, as well as lodging a direct complaint against Swiss financial market supervisor FINMA.

CHF16 billion francs suddenly worthless

As part of the takeover of Credit Suisse by UBS, ordered by authorities on March 19, CHF16 billion ($17.8 billion) in Additional Tier 1 (AT1) bonds were declared worthless.

Numerous law firms have since announced that they are challenging this. Complaints on behalf of more than 1,000 bondholders against FINMA have already been filed to the Federal Administrative Court in St Gallen.

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