LONDON: European banking stocks slumped yesterday as investors reeled from the historic weekend takeover of Credit Suisse Group AG that will wipe out a class of bondholders.
Under the terms of UBS Group AG’s acquisition of Credit Suisse, holders of securities known as additional Tier-1 (AT1) bonds will be wiped out, potentially sending the US$275bil (RM1.2 trillion) market for bank funding into a tailspin. UBS shares fell 8.6% while Credit Suisse plunged 58%.
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