The bond redemption was illegal. Ubs will have to repay CHF 16 billion. Hundreds of Italians are also involved
The Swiss federal court has decided the first case on the state bailout of Credit Suisse. 'Transactions without legal basis', betrayed savings
Key points
The cancellation of the Additional Tier 1 bonds decided by the Swiss Finma on the eve of the merger between Credit Suisse and Ubs, - 16.5 billion francs of nominal value - was an illicit operation: the bonds issued and then immediately cancelled will have to be reimbursed to the betrayed savers, among which hundreds of Italians of the more than 3,000 plaintiffs in the sensational class action.
State Rescue
The partial decision of the Swiss Federal Supreme Court in St. Gallen of 1 October, which was made public today, brings us back to the turbulent spring days of two years ago, when the controversial state rescue of Credit Suisse was carried out. On 19 March 2023, representatives of the Federal Department of Finance, the Financial Market Supervisory Authority, the Swiss National Bank and the banks involved announced a package of measures in connection with the takeover of Credit Suisse by UBS, including the cancellation of all Additional Tier 1 capital instruments, which the Federal Council also intervened in, giving immediate institutional coverage to the decision.
Three thousand claimants
About 3,000 private parties had immediately appealed about 3,000 private parties, hinged in 360 appeals, requesting the annulment of the decision and the reinstatement of the previous situation, denouncing the absence of a contractual and legal basis for resetting the AT1 bonds to zero.
La decisione del Tribunale federale di San Gallo è tecnicamente una «sentenza parziale» nell’ambito di una sorta di class action - dal momento che le argomentazioni giuridiche potranno essere utilizzate in ognuno dei procedimenti associabili per fattispecie, ma ha un peso specifico importante: secondo il Taf, infatti, «non si è verificato alcun evento scatenante (Viability event)» contrattualmente previsto che potesse dar luogo all’effetto write-off- azzeramento. In quel periodo, scrive il Tribunale in una nota, «Credit Suisse era sufficientemente capitalizzata e soddisfaceva i requisiti normativi in materia di fondi propri. Le misure disposte dalla Confederazione e dalla Banca nazionale svizzera servivano unicamente a garantire la liquidità e non avevano alcun effetto diretto sulla base di capitale proprio secondo l’interpretazione del
"Serious interference" to the detriment of savers
Even harsher is the Taf's judgement on the authority's actions, since the write-off ordered by Finma 'constituted a serious interference in the property rights of the bondholders that should have been governed by a clear and formal legal basis', a legal basis that was completely absent for the judges.
