2023 proved to be an eventful year for the Additional Tier 1 (AT1) Contingent Convertibles (CoCo) market, with one of the most significant occurrences being the full write-down of Credit Suisse’s AT1s. The forced takeover of Credit Suisse by UBS sent shockwaves through the banking sector and had a profound impact on the AT1 CoCo market. Unexpectedly, Credit Suisse CoCo’s were written down, while equity holders were not wiped-out. The traditional credit waterfall was not respected, to the surprise of almost the full market – a black swan had hit the CoCo market.
To read this article, you need a subscription to Investment Officer. If you don't have a subscription yet, click on 'Subscribe' to see the various subscription options.
