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© Reuters. Japanese firms sold 677 million euros of Credit Suisse AT1 bonds
Tokyo, April 20 (.).- Japanese brokerages sold more than 100,000 million yen (677 million euros) in AT1 debt bonds of Swiss credit (SIX:) before its bankruptcy, according to data revealed today that reflect the possible losses for Japanese clients.
That amount has been accounted for in Credit Suisse’s riskier hybrid assets, also known as contingently convertible bonds or “coconuts,” according to data released today by the Japan Brokerage Services Association (JSDA).
The Japanese industry association has estimated this amount after carrying out an “in-depth investigation” among the Japanese firms, according to Toshio Morita, the director of JSDA, at a press conference on Thursday.
The decision of the Swiss authorities to zero out the issues of the entity’s AT1 bonds for a value of 16,000 million Swiss francs (15,960 million euros) to absorb part of the losses and facilitate their purchase by UBS (SIX:) It will mean that the holders of these bonds will have to assume that cost a priori.
The JSDA did not provide detailed data on how much corresponds to each Japanese entity, although other information published by local media indicated that the brokerage arm of Mitsubishi UFJ (TYO:) would have sold 95,000 million yen in Credit Suisse AT1 bonds, so it would be responsible for most of those potential losses.
UBS acquired Credit Suisse at the behest of the Swiss government for 3 billion francs (3.05 billion euros) to save it from bankruptcy.
The losses that the entity accumulated, together with numerous image scandals and a drop in investor confidence in the stock market after the fall of Silicon Valley Bank and Signature Bank in the United States, led the second largest bank in Switzerland to a serious crisis that the country’s government tried to stifle it with its purchase by UBS.
