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What CoCo bond write down? Or do you mean those special bonds bank issues that go to zero before any other assets during a run?
by HWR_14 3y ago
What CoCo bond write down? Or do you mean those special bonds bank issues that go to zero before any other assets during a run?
- throwaway2037 3y agoThanks for asking. Yes, exactly right. To be clear, I needed to Google the exact meaning of CoCo bonds. It would better to say AT1 bonds. Google defines AT1/CoCo bonds as: AT1 bonds are contingent convertable (CoCo) bonds that are designed to functon as both debt and equity. More: https://www.investopedia.com/terms/c/contingentconvertible.asp https://www.investopedia.com/terms/c/contingentconvertible.a... BTW -- The writedown is incomplete. There are numerous court battles in numerous jurisdictions that may take 5-10 years to wind down. And, no, I don't think the Swiss Gov't will lose any of them. In the end, UBS will probably throw some pennies at these poor fools.
- HWR_14 3y agoThose poor fools got a premium rate for this to happen. Like, the entire point of AT1 bonds is this can happen. Other banks have AT1 bonds, and I think they have also been written down. Far from the Swiss government pulling a bait and switch, the point of AT1 bond is to have privatized safety net like how it is being used.