Swiss court overturns the 2023 decision that erased $17 billion in Credit Suisse AT1 bonds

A Swiss court has ripped open a case many thought was ￰0￱ Federal Administrative Court just overturned the 2023 order that wiped out $17 billion worth of Additional Tier 1 (AT1) bonds tied to Credit Suisse, according to ￰1￱ were the same bonds investors were told were worth zero when UBS Group AG was pushed to take over the failing bank in a government-brokered ￰2￱ decision had left bondholders blindsided and furious. Now? They’re back in the fight, and they want their ￰3￱ ruling, which came down this week, doesn’t mean investors will immediately be ￰4￱ it cancels the core decision that vaporized the bonds in the first ￰5￱ while Switzerland’s financial regulator, Finma, has already said it will challenge the court’s decision, the ruling has cracked open a new legal path that investors are ready to ￰6￱ of them are now pointing to Lehman Brothers as a possible playbook for how this all ends—with a ￰7￱ push Lehman comparison as prices jump The Lehman comparison isn’t ￰8￱ the 2008 crash, creditors of Lehman Brothers International Europe, the London branch, were repaid in full, with interest, after sitting on crushed claims for ￰9￱ result has become the holy grail for distressed ￰10￱ people holding claims linked to Credit Suisse’s wiped AT1s said they’re hoping for something just like ￰11￱ refused to be identified since they’re not cleared to speak publicly, but their message is loud: they’re in it for the long ￰12￱ the takeover, these AT1 bonds have been stripped of their classification as ￰13￱ means no coupons, no investor protections, no legal borrower ￰14￱ ￰15￱ ￰16￱ more than two years, holders have watched their position sit dead on ￰17￱ Tuesday’s court decision has changed the ￰18￱ operating in a niche secondary market saw the value of these claims rise fast, from 12 cents to around 30 cents on the dollar.

That’s not recovery, but it’s no longer dead ￰19￱ Miginiac, head of research at Atlanticomnium, said his firm, which was exposed to the bonds, is running the numbers on how this could play out. “The case remains uncertain and complex,” Romain said. “If bondholders do end up being compensated, the amount is also uncertain.” He said investors are modeling everything from full recovery with interest, to something closer to what Credit Suisse shareholders received: 3 billion Swiss francs, or about $3.75 ￰20￱ ruling triggers legal momentum, but payout still far away Some firms are already taking legal ￰21￱ Harrison, managing partner at Pallas Partners, represents several ￰22￱ called the court’s ruling a major moment.

“This ruling represents a crucial step toward ending a prolonged period of uncertainty for our clients, who have waited far too long for justice,” Natasha said. “By finding that the so-called ‘viability event’ never occurred and the writedown had no other legal basis, the Court has set the record straight.” But that doesn’t mean bondholders can start counting ￰23￱ said it would ￰24￱ top of that, the court still hasn’t issued a formal reversal of the original write-down ￰25￱ while the ruling tore down a legal wall, it didn’t rebuild anything in ￰26￱ money’s still stuck in ￰27￱ Lehman investors had to ￰28￱ that case, creditors tied to the European arm weren’t repaid until more than a decade after the New York-based bank collapsed.

That’s the timeline people are preparing for here too. A legal marathon, not a ￰29￱ added one last warning: “It’s a very positive first step but definitely not a done deal.” Claim your free seat in an exclusive crypto trading community - limited to 1,000 members.