First issuance since Credit Suisse takeover
- UBS to issue $3.5 billion in AT1 bonds
- First issuance since Credit Suisse takeover
- AT1 bonds are a funding source for UBS and other banks
- Credit Suisse’s AT1 bonds were written off in March
- UBS’s AT1 bonds have a conversion feature
- Issuance comprises two parts of $1.75 billion each
UBS Group has announced the issuance of $3.5 billion in Additional Tier 1 (AT1) bonds, marking the first such issuance since the acquisition of Credit Suisse. AT1 bonds serve as a funding source for UBS and other banks to strengthen their capital buffers. In contrast to Credit Suisse, which had $17 billion of its AT1 bonds written off in March, UBS’s AT1 bonds have a conversion feature that allows them to be converted into ordinary shares instead of being written off. This feature aims to reassure concerned investors about the bank’s viability. The issuance consists of two parts, with $1.75 billion of 9.25% notes redeemable after five years and $1.75 billion of 9.25% notes redeemable after ten years, at UBS’s discretion. UBS CEO Sergio Ermotti expressed confidence in the bank’s ability to continue using AT1 bonds in the future.
Factuality Level: 8
Factuality Justification: The article provides factual information about UBS’s issuance of $3.5 billion in Additional Tier 1 bonds and the unique clause that the bonds will convert to ordinary shares instead of being written off. It also mentions the write-off of Credit Suisse’s AT1 bonds and the bondholders suing for repayment. The article includes quotes from UBS’s Chief Executive Sergio Ermotti and provides details about the issuance.
Noise Level: 7
Noise Justification: The article provides information about UBS’s issuance of Additional Tier 1 bonds and the implications of Credit Suisse’s write-off of their AT1 bonds. It also mentions the demand for UBS’s AT1 instruments and the conversion feature in their issuance. However, the article lacks in-depth analysis, scientific rigor, and actionable insights. It mainly focuses on reporting the facts without providing a broader context or exploring the consequences of these events.
Financial Relevance: Yes
Financial Markets Impacted: UBS Group, Credit Suisse
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses UBS Group’s issuance of $3.5 billion in Additional Tier 1 bonds, which are a funding source for UBS and other banks to prop up their capital buffers. It also mentions the write-off of $17 billion in Credit Suisse’s AT1 bonds by Swiss authorities as part of its rescue package. However, there is no mention of any extreme event or its impact, thus the presence of an extreme event and its impact rating are null.
Public Companies: UBS Group (UBS), Credit Suisse (CS)
Key People: Sergio Ermotti (Chief Executive)
Reported publicly:
www.marketwatch.com 
