Internationally known investment loss attorneys at U.S. law firm KlaymanToskes reports Credit Suisse Additional Tier 1 (“AT1”) bond holders in Japan are facing a ¥140 Billion ($1 Billion) Loss following UBS Group AG’s emergency acquisition of Credit Suisse Group AG (NYSE: CBS).
The AT1 bonds, which have lost all value, were wiped out when the Swiss government facilitated an emergency acquisition of Credit Suisse by UBS Group AG last month. Credit Suisse’s AT1 bond wipe out is the largest AT1 write-down in Europe’s market to date.
Around the world, investors are facing severe losses in Credit Suisse’s high-risk bonds, with recent estimates surpassing approximately 16 billion Swiss francs ($18 Billion). At least ¥140 Billion ($1 Billion) of Credit Suisse’s AT1 Bonds were sold in Japan according to an announcement by Japan’s Financial Services Minister, Shunichi Suzuki, at a press conference on Friday April 21st.
140 billion yen worth of Credit Suisse AT1 Bonds were sold in Japan – Contact attorney Lawrence L. Klayman, Esq. on the web at KlaymanToskes.com or by email at email@example.com for a free consultation to discuss recovery options.
According to the Financial Services Agency of Japan, it has reason to believe that the AT1 bonds were sold to mainly wealthy individual investors and companies. It has recently been disclosed that customers of Mitsubishi UFJ Financial Group Inc., one of the largest banking institutions in Japan, have suffered investment losses due to the risky bonds.
Mitsubishi UFJ Financial Group Inc.’s clients reportedly lost over $700 million on Credit Suisse Group AG’s AT1 Bonds. These customers may have purchased bonds through the bank’s Morgan Stanley venture. According to public records, Mitsubishi UFJ previously acquired a 21% interest in Morgan Stanley and 9.9% of its Common Stock.
The Mitsubishi UFJ Financial Group MorganStanley (“MUFGMS”) website states that the group has “an extensive client network well-balanced in Central, East and West Japan which consists of approximately 550 locations throughout Japan”. Allegedly, according to several news outlets, the banking group is holding meetings of senior officials to look into the matter, which “reaches out to roughly 1,500 clients”.
Regarding the same issue, clients of other Japanese financial institutions such as Mizuho Financial Group, Inc. lost over ¥4 billion on the Additional Tier 1 notes ($30 million). Daiwa Securities Group Inc. also suffered losses of around ¥1 billion (7.5 million).
In related news, Japanese gaming company Koei Tecmo Holdings has lost $30 million on Credit Suisse Additional Tier 1 Bonds (“AT1”), according to the company’s Chairman, Keiko Erikawa, who directed the sale of the bonds. Erikawa disclosed during an earnings briefing on Monday, April 24th that the company attempted to sell the bonds but was unable to do so on time. The company, Koei Tecmo Holdings, recorded the loss for the fiscal year ending in March.
Additional Tier 1 bonds (AT1) are a type of hybrid bond designed with a “loss absorption” mechanism that allows them to convert into stock, or to implement permanent losses on bondholders, if the issuer’s capital ratios fall below a predetermined threshold.
AT1 bonds, also known as “contingent convertibles” or “CoCos,” were introduced to Europe’s financial markets to serve as preventative measures for banking collapses in the wake of the global financial crisis of 2008.
Credit Suisse’s AT1 bond wipe out is the largest write-down in Europe’s $275 billion AT1 market to date. In 2017, Europeans faced a similar AT1 investment write-down by Spanish lender Banco Popular SA, when it was absorbed by Banco Santander SA for €1 to avoid collapsing.
The €1.35 billion ($1.44 billion) loss suffered in Europe’s now-second-largest bond write-down represents a small portion of what Credit Suisse and other European banks in today’s market face.
Credit Suisse AT1 Bond investors may be entitled to a financial recovery for any investment losses incurred. Affected investors are encouraged to contact attorney Lawrence L. Klayman, Esq. at (888) 997-9956 or firstname.lastname@example.org for a free consultation to discuss recovery options. We do not collect attorney’s fees unless we obtain a financial recovery for you.
KlaymanToskes is a leading United States securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.