Pacific Investment Management Co. is considering joining hundreds of investors in challenging the Swiss regulator’s decision to wipe out about $17 billion of Credit Suisse Group AG bonds following the bank’s takeover by UBS Group AG.
(Bloomberg) — Pacific Investment Management Co. is considering joining hundreds of investors in challenging the Swiss regulator’s decision to wipe out about $17 billion of Credit Suisse Group AG bonds following the bank’s takeover by UBS Group AG.
Pimco, which filed a suit against Finma in order to meet an early May deadline for such submissions, has not yet joined any of the bondholder groups, according to a person familiar with the situation.
The firm is weighing whether to potentially pursue legal action to recoup some of its $800 million of Credit Suisse’s so-called Additional Tier 1 bonds, according to people familiar with the matter. Those bonds were written down to zero after the acquisition and the Newport Beach, California-based asset manager was among the largest holders of the bonds.
Read More: Pimco, Invesco Face Losses in Credit Suisse Debt Writedown
Bondholders have argued the writedown was an unfair and disproportionate move that put shareholders before bondholders. Defenders of Finma’s decision point out that the risk of a writedown was laid out in the bonds documents.
The Swiss Federal Administrative Court has said it has received around 230 appeals, involving roughly 2,500 claimants, against the March 19 writedown.
Law firm Pallas Partners, which filed a suit in April, is seeking full compensation for its clients, which as of early May included 90 institutional investors and asset managers with $1.35 billion in AT1 bonds, as well as 700 retail and family office clients accounting for some $300 million.
Quinn Emanuel Urquhart & Sullivan filed in April and has now amassed more than 1,000 clients, including institutional investors, that held around $6 billion in the bonds. Besides these, at least three other complaints have been filed.
Read More: Credit Suisse’s AT1 Wipeout Is Destined for Court: QuickTake
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.