Spain's BBVA and Bank of Cyprus reopened the market with the issuance of the first euro-denominated contingent convertible bonds (CoCo) since the rescue of Credit Suisse in March, in what is seen as an attempt to restore confidence in the banks' riskiest debt instruments, Reuters reported. The Spanish bank said it aimed to raise between 750 million euros ($810.08 million) and 1 billion euros with this issuance. According to a lead manager memo seen by Reuters, the issuance had already received orders worth over 3 billion euros.
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Switzerland
A committee that reviews disputes in the credit default swaps (CDS) market said on Monday that it had been asked to address a question of whether there is a successor to Credit Suisse Group, Reuters reported. This comes on the day that UBS completed its emergency takeover of embattled local rival Credit Suisse, creating a giant Swiss bank with a balance sheet of $1.6 trillion and greater muscle in wealth management. The CDS panel said on its website it has accepted the question by an investor and it will meet on Tuesday at 13:00 GMT to discuss it.
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Swiss National Bank Chairman Thomas Jordan repeated his commitment to fight "stubborn" inflation on Thursday in his final public appearance before the central bank announces its next interest rate decision, Reuters reported. Swiss annual inflation dipped to 2.2% in May, government data showed on Monday, but has remained above the 0-2% range targeted by the SNB since February 2022. "It is really important to get inflation down to the level of price stability," Jordan told the Swiss Economic Forum, which took place in Interlaken. "Inflation remains very stubborn," he said.
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Switzerland's UBS said Monday that it expects to complete its takeover of longtime rival Credit Suisse as early as next week, the Associated Press reported. The two Zurich-based banks are uniting in a 3 billion-franc ($3.3 billion) deal that was arranged hastily in March by the Swiss government and regulators after Credit Suisse’s stock plunged and jittery depositors quickly pulled out their money. The merger was aimed at stemming upheaval in the global financial system after the collapse of two U.S. banks shook confidence in the sector.
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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.
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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