Withers is receiving many inquiries from Indonesians about the Credit Suisse AT1 wipeout, adding that there could be solutions outside of the country.
Following the wipeout of 16 billion Swiss francs ($18 billion) in Credit Suisse's Additional Tier 1 (AT1) bonds, investors worldwide are exploring options about how to deal with the unprecedented write-down. According to law firm Withers KhattarWong, it is receiving «many approaches» from Indonesia and has formed an international team to provide support for clients.
«Increasingly, questions are being asked around the extent to which a 'viability event' required to justify any write down could be said to have indeed occurred, and whether Credit Suisse had indeed reached any internal liquidity limits and fallen short of capital adequacy requirements earlier than what was publicly represented by the Swiss authorities,» Withers said in a statement.
Foreign Options
Withers notes that while Indonesia does not have a bilateral investment treaty, economic partnership agreement or free trade agreement with Switzerland that could form the basis of an investment treaty claim for the country’s investors, there could be solutions elsewhere.
«Indonesian bondholders could have access to investment treaties of other countries in certain circumstances such as where bondholders can be characterized as having the right of permanent residence of a different country or where bonds are held through offshore entities,» the law firm explained, adding that it has a team to assess individuals' investor status.
