Credit Suisse’s risky bonds are now worthless

Downturn: A person walks in front of an electronic stock board showing indexes at a securities firm in Tokyo. Asian stock markets are down after Swiss authorities arranged the takeover of troubled Credit Suisse amid fears of a global banking crisis. — AP

ZURICH: Holders of Credit Suisse Group AG bonds suffer a historic loss as a takeover by Union Bank of Switzerland (UBS) Group AG wipes out about 16 billion Swiss francs (US$17.3bil or RM78bil) worth of risky notes.

The deal will trigger a “complete write-down” of the bank’s additional Tier-1 bonds in order to increase core capital, the Swiss Financial Market Supervisory Authority (Finma) said in a statement on its website. Meanwhile, the bank’s shareholders are set to receive three billion francs (RM15bil).