UBS: “Hold my beer while I’ll tell you my offer price!” 
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They notably don’t offer them in their 3a products.
CS is a much bigger player in services and funds for pension/retirement funds in Switzerland (as far as so know - though I also heard or read someone confirm that on either NZZ or SRF). And I suppose that most of the invested money in such funds is quite “inert”.
Closing down such funds could, I suppose, “activate” these institutional investors and make them reevaluate their position - with the risk that they move to Swisscanto altogether.
When it comes to serving pension funds, I assume it could make more sense to “reversely” fold UBS’ existing business into CS (while changing brand anyway, of course).
I’ve been thinking about you and your sentence all day, but well, it’s still too early to say “I told you so”. 
Edit: I told you 
Deal is done. 2 billion by UBS.
Live at 19:00.
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I guess that concludes the thread.
What would happen if Credit Suisse goes bust?
Answer: It would be force-fed to UBS.
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… plus 100 billion liquidity by SNB guaranteed lol.
The moral of the story is that only one bank in Switzerland is “too big to fail” if even the federal council sides with it by offering liquidity.
I have the impression that UBS is a kind of retail bank for the SNB and the Federal Council.
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This is a bit sad, especially for the employees who will probably have their contracts terminated… 9,000 new unemployed?
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Here’s the official announcement from CS.
Under the terms of the merger agreement all shareholders of Credit Suisse will receive 1 share in UBS for 22.48 shares in Credit Suisse.
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Curious about what the following excerpt really means:
On Sunday, Credit Suisse has been informed by FINMA that FINMA has determined that Credit Suisse’s Additional Tier 1 Capital (deriving from the issuance of Tier 1 Capital Notes) in the aggregate nominal amount of approximately CHF 16 billion will be written off to zero.
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I hope it does not mean what I understand it means.
For me it means that AT1 bond holders will lose their investment, while shareholders will get something.
Which:
- Would be in direct contradiction with the capital structure (bondholders should have priority over shareholders)
- Would create disarray in the AT1 bond market tomorrow, with possibly many more banks in difficulty…
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You did.
Either way, we’ll both (as shareholders) be holding that bag. 
At least we can safely conclude that 16 Billion CHF liabilities had to be written off in urgency. It hints at a symmetrical hole in the assets known to the people who discussed the deal but not to the rest of the world.
We can only hope for UBS that there are not much more bad surprises in the CS balance sheet.
Not to mention that the sharp rise in interest rates will guaranteed do additional damage to most banks, healthy or not.
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I just hope that this won‘t have a negative impact on the future of UBS. They are maybe taking over way more garbage than they are currently assuming. This could srsly damage the whole economy, not only the banking industry.
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14 posts were split to a new topic: Additional Tier 1 (AT1) bonds
Another question: What are the odds that a fusion between two unwilling companies, one of them with the back at the wall, is successful?
I also hope that CS is not toxic enough to poison UBS.
What an amazing downfall. Big blow to Switzerland’s image of “stability” that even with all the SNB backing last week (50bn credit line) the panic continued such that they feel they need to sell Credit Suisse so quickly over the weekend. And to CS’s biggest competitor! (monopoly/anti-competition just ignored?)
Now we better hope in the short term that the panic doesn’t continue to UBS. SNB adding some even more extreme backing there to try and prevent this 
.
Summarised points from the FT (thanks to gpt-4):
- UBS agrees to buy Credit Suisse for $3.25bn after urgent negotiations to prevent a crisis in the Swiss banking system.
- Swiss National Bank’s emergency credit line of $54bn failed to stabilize Credit Suisse’s falling share price.
- Swiss president Alain Berset announces that the takeover was necessary to restore market confidence.
- UBS will pay around SFr0.76 a share in its own stock, worth SFr3bn, up from an earlier rejected bid of SFr0.25.
- Swiss National Bank offers SFr100bn liquidity line to UBS, backed by a federal default guarantee.
- Swiss government provides a loss guarantee of up to SFr9bn after UBS bears the first SFr5bn of losses on certain portfolios.
- SFr16bn of Credit Suisse’s Additional Tier 1 capital bonds will be written off to zero.
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The credit default swaps for UBS have gone up substantially on the announcements. I have no access to the live data myself but screenshots of the charts are circulating on Twitter.
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Bloomberg thinks what you think.
(Also, see Reuters reporting on it with similar thinking as yours)
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