Another group of investors face losses related to Credit Suisse’s AT1 bonds.
Over the past few weeks a group of investors have been counting on the write down of Credit Suisse’s AT-1 bonds triggering collateral default swaps (CDS) on ordinary Credit Suisse bonds.
After weeks of back and forth, a panel at the European Credit Derivatives Committee (CDDC) which oversees the credit-default swap market, announced the write-off of Credit Suisse convertible bonds does not constitute a bankruptcy credit event.
Hedge funds traders in particular were still buying default protection CDSs in May, hoping for a potential insurance payout.
