Credit Suisse AT1 bondholders seek legal advice after Swiss regulator wipes out $17bn of debt
Credit Suisse AT1 bondholders are seeking legal advice after Swiss regulator FINMA ordered $17bn of the lender's Additional Tier 1 (AT1) debt to be written down to zero, while shareholders received some compensation. The decision has rattled the $275bn AT1 bond market, prompting a sharp fall in prices. The AT1s, which have dropped in value to just a few cents in the dollar following the move, are being traded by hedge funds in a so-called litigation play. AT1 bonds are the riskiest type of debt banks can issue, ranking immediately after equity in the event of losses.