Credit Suisse failed this weekend — or at least it would have, were it not too big to fail. Instead, Switzerland's banking regulators cobbled together an emergency solution that leaves nobody happy — but at least prevents a catastrophe for the global financial system.
UBS is buying Credit Suisse for roughly negative $14 billion. It's paying $3.2 billion to Credit Suisse shareholders, but only because Swiss regulators are wiping out $17.2 billion of the bank's liabilities, leaving those bondholders with nothing.
In the normal world of mergers and acquisitions, that wouldn't be possible. Bondholders are senior to shareholders, meaning that they get paid out first, and only once they're paid out in full do shareholders get anything.
March 20, 2023; "Credit Suisse is an unavoidably messy bank failure": https://www.axios.com/2023/03/20/credit-suisse-unavoidably-messy-bank-failure
How it started: Credit Suisse sets a price target for AMC at $0.95 per share.
How it's going: Credit Suisse share price falls below $0.95, the price target they set for AMC.
Purchase price is 0.27 a share no?
Pull your money out of the banks while you still can