The all-share deal includes extensive government guarantees and liquidity provisions. The price per share marked a 99% decline from Credit Suisse’s peak in 2007. The Swiss National Bank is also offering a 100b-franc liquidity assistance to UBS while the government is granting a 9b-franc guarantee for potential losses from assets UBS is taking over. Regulator Finma said about 16b francs of Credit Suisse bonds, known as AT1s, will become worthless to ensure private investors help shoulder the costs.
“It was indispensable that we acted quickly and find a solution as quickly as possible“ given that Credit Suisse is a systemically important bank, Swiss National Bank President Thomas Jordan said at a press conference late Sunday.