Credit Suisse bond write-down revoked in partial win for investors

A Swiss court decision has given fresh hope to Credit Suisse bond holders, including those in Singapore, who sought damages after their investments were wiped out when UBS Group rescued the bank in a government-brokered deal.

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The complainants, some 3,000 investors, had argued that the March 2023 decree to write down 16.5 billion Swiss francs (S$26.7 billion) of additional-tier 1 bonds (AT1s) was unlawful and should be revoked, and the write-down be reversed.

The Swiss Federal Administrative Court ruled on Oct 1 on one of those as a test case, siding with those complainants' right to appeal and revoking the decree, according to a statement from the tribunal on Oct 14.

The court said it has not yet decided on the reversal request and that the other cases are now suspended until the decision regarding the revocation of the decree becomes final.

That means any actual compensation could be years away.

Around 300 Singaporean ATI investors are among those claiming losses amounting to about US$250 million (S$324 million), Drew & Napier said in February.

The law firm is leading an action against the Swiss government to recover the losses from the write-down of the ATIs arising from UBS' takeover of Credit Suisse.

Under bilateral investment treaties, Switzerland is obligated to protect investors' rights and ensure that they are treated fairly and equitably, the law firm noted.