UBS on Thursday won unconditional EU antitrust approval to acquire Credit Suisse as part of a government-orchestrated rescue of its Swiss rival, Reuters reported. The European Commission said the deal would not raise competition concerns in Europe, confirming a Reuters story earlier this month. "The combined entity will continue facing significant competitive pressure from a wide range of competitors in all of those markets, including several major global banks as well as specialist providers and strong local players," the EU competition watchdog said in a statement.
Switzerland
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UBS Group AG said on Tuesday it was in negotiations with Swiss authorities about loss protections related to its takeover of Credit Suisse Group AG and its regulatory capital requirements, Reuters reported. The disclosure underscores how some aspects of the tie-up between the two banks, arranged hastily over a weekend in mid-March by the Swiss government to stave off a broader banking crisis, have yet to be ironed out.
A derivatives committee ruled on Monday that a bankruptcy credit event had not occurred in relation to Credit Suisse, quashing investors' efforts to trigger a payout on credit insurance linked to the Swiss lender, Reuters reported. The ruling was in response to an investor question about $17 billion in senior and subordinated bonds issued by Credit Suisse, whose holders were wiped out when the Swiss bank was taken over by UBS in March in a state-assisted deal. The ruling upended a long-established practice of giving bondholders priority over shareholders in a debt recovery.
A day after dismissing a question that would have forced a payout on some of Credit Suisse Group AG’s default swaps, a panel that oversees the derivatives market received another query that could trigger the contracts, Bloomberg News reported. The Credit Derivatives Determinations Committee was asked whether a bankruptcy credit event had occurred with regards to the Swiss lender in March, when it was taken over in a hastily arranged deal by rival UBS Group AG, according to a statement on its website. The ploy is seen as having little chance of success.
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A panel tasked with overseeing the credit default swaps market said that the writedown of Credit Suisse Group AG’s Additional Tier 1 notes will not trigger an insurance payout, Bloomberg News reported. The Credit Derivatives Determinations Committee ruled at a meeting on Wednesday that the controversial wipeout of the high-risk bonds won’t lead to a payout of the default swaps tied to the bank’s subordinated debt, according to a notice on its website.
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UBS Group AG was rushed into buying cross-town rival Credit Suisse Group AG in a deal it did not want, as a global bank crisis worsened the latter's finances and prompted authorities to take swift action, a regulatory filing showed, Reuters reported. UBS, in a Tuesday filing to the U.S. Securities and Exchange Commission, told investors it had less than four days to conduct due diligence given the "emergency circumstances". It estimated a hit of about $17 billion from the takeover. Switzerland's biggest bank agreed to buy its smaller rival after the latter had endured a difficult year.
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Two months after many investors were caught off guard by the writedown of Credit Suisse Group AG’s Additional Tier 1 bonds, the securities are once again at the center of a market debate. This time the divide is over whether the event will trigger an insurance payout, Bloomberg News reported. Funds including FourSixThree Capital and Diameter Capital Partners have been buying credit default swaps linked to another set of junior Credit Suisse bonds, betting that the derivatives panel tasked with overseeing the market will rule that a credit event has occurred.
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A potential dispute over the wipeout of Credit Suisse Group AG’s riskiest bonds in Asia has drawn the attention of several funds experienced in financing lawsuits for retail investors, Bloomberg News reported. Burford Capital Ltd., which says it is the world’s biggest provider of commercial legal finance, is tracking the development as law firms rally aggrieved bondholders. Last week, a group of more than 60 holders in Asia filed a claim against Switzerland’s banking regulator over the decision to write down about 16 billion Swiss francs ($18.1 billion) of additional tier-one notes.
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Six weeks since the deal to rescue Credit Suisse Group AG was rushed through, at least 120 claims have been filed against the Swiss banking watchdog’s decision to wipe out about $18 billion worth of its high-risk bonds as part of the deal, Bloomberg News reported. As of May 2, the claims represent around 1,300 individual bondholders, according to a spokesman for the Swiss Federal Administrative Court. Claimants focused on a notional deadline to file of May 3.
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UBS was considering the potential impact of buying struggling rival Credit Suisse as early as December, months before the takeover was hastily arranged by Swiss authorities in March, according to a regulatory filing, Reuters reported. The filing with the U.S. Securities and Exchange Commission (SEC) also showed UBS concluded in February that buying Credit Suisse was not desirable, but that it should prepare in case its rival encountered "serious financial difficulties".
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