The French insurer Axa assured Monday not to be exposed to shares or bonds at risk called AT1 of Credit Suisse, but to have “a limited exposure of nearly 600 million euros” to other debt securities of the bank.
“Axa has no exposure to Credit Suisse AT1s or the capital of Credit Suisse”, whose stock price fell sharply last week, a spokesperson for the insurer said in a brief statement the day after the takeover. precipitated from the troubled bank by UBS.
UBS will buy Credit Suisse for 76 Swiss franc cents per share – very little, even compared to Credit Suisse’s already much degraded stock value of 1.86 francs at the close on Friday.
The redemption will also cause the loss of 16 billion Swiss francs to holders of risky bonds called Additional Tier 1 (AT1).
AT1 debt securities, also known as CoCos, were created in the wake of the 2008 financial crisis and are included in the calculation of a bank’s equity. In the event of a serious deterioration in the financial situation of an institution, the latter may suspend the payment of coupons or convert the debt securities into shares.
Axa, on the other hand, has “a limited exposure of almost 600 million euros” in less risky bonds from Credit Suisse, he added.
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The insurer says it has “less than 20 million euros of exposure” to AT1-type bonds.