Some Credit Suisse AT1 bondholders seek legal advice -law firms

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By Laura Matthews and Chiara Elisei

(Reuters) -Legislation business Pallas Associates and a Swiss counsel are functioning on achievable lawful motion for some Credit history Suisse bond investors whose holdings ended up wiped out next the bank’s takeover by UBS Group AG, Pallas Associates said.

London-primarily based Pallas Associates instructed Reuters on Tuesday it was in speak to with a selection of institutional and hedge fund buyers in Credit Suisee More Tier 1 (AT1) bonds, with a check out of forming a group and discovering litigation selections in the Swiss courts as well as London and New York.

“The structure of the (takeover) offer is unparalleled, subverting and wiping out the AT1s and prioritising the equity,” mentioned Natasha Harrison, Pallas Partners’ founder and managing husband or wife.

She mentioned the purpose was to make a litigation strategy to assist those people traders hunting to get well their losses.

Below the UBS-Credit history Suisse offer, holders of Credit score Suisse AT1 bonds will get nothing, even though shareholders, who usually rank below bondholders in terms of who gets compensated when a bank or firm collapses, will acquire $3.23 billion.

Separately, some holders of Credit rating Suisse’s bonds have approached law firm Korein Tillery to also evaluate no matter if they have a circumstance towards the Swiss authorities’ conclusion to wipe out their holdings as element of the UBS Group AG deal.

George Zelcs and Chris Burke, companions at Korein Tillery, a boutique legislation organization specialising in intricate litigation, mentioned fewer than a dozen non-U.S. bondholders had approached them to focus on solutions. The company has not nevertheless been hired.

Neither firm named the bondholders.

Their conversations occur after law business Quinn Emanuel Urquhart & Sullivan claimed on Monday it was in conversations with Credit history Suisse AT1 bondholders representing a “considerable proportion” of the overall notional benefit of the instruments.

A contact with bond holders is scheduled to acquire area on Wednesday, according to Quinn Emanuel.

Switzerland’s Federal Section of Finance reported it would not remark on a hypothetical situation.

Korein legal professionals are inspecting the language of the AT1 bond contracts and whether regulators have the authority to wipe out the bonds with out to start with undertaking the very same for equities, the lawyers mentioned.

(Reporting by Laura Matthews and Chiara Elisei extra reporting by Noele Illien Modifying by Chizu Nomiyama, Dhara Ranasinghe and Emelia Sithole-Matarise)