Bond Fraud Lawyers

Why Credit Suisse 7.5% Perpetual AT1 Bond Investors May Want To Explore Their Legal Options

Our Bond Fraud Lawyers Are Investigating Whether Broker-Dealers Committed Due Diligence Failures 

With the UBS/Credit Suisse merger resulting in the writing off to zero of $17.2B Credit Suisse contingent convertible bonds (CoCos), investors of the latter’s Credit Suisse 7.500% Perpetual Corp. and its other CoCo bond offerings may have reason to worry. While the merger and resulting write-off of all Credit Suisse AT1 bonds may be reassuring to the Swiss Banking sector, investors of these bonds could be looking at significant losses. Although, it isn’t so much the write-down of the bonds but that the bondholders are not getting any compensation, while the bank’s shareholders are getting paid $3.23B, which is purportedly causing problems.

Shepherd Smith Edwards and Kantas (investorlawyers.com) are looking into whether brokerage firms may have unsuitably recommended the following Credit Suisse AG bonds to investors, including:

• Credit Suisse 7.500% Perpetual Corp. AT1 Bonds
• CS 7.500% Perpetual Corp (USD)
• CS 5.100% Perpetual Corp (USD)
• CS 5.625% Perpetual Corp (SGD)
• CS 9.750% Perpetual Corp (USD)
• CS 6.250% Perpetual Corp (USD)
• CS 5.250% Perpetual Corp (USD)
• CS 7.250% Perpetual Corp (USD)
• CS 6.375% Perpetual Corp (USD)

What Are AT1 Bonds and Why Are They So Risky for Investors? 

Additional Tier 1 bonds are high-yield investments. They are a cross between a bond and a stock. Designed to support banks in raising capital to satisfy regulations after the 2008 bailouts during that financial crisis, AT1 bonds have the traits of both equity and debt instruments.

Due to these bonds being “contingent convertible” in nature, they can easily be turned into equity in the wake of certain events impacting a bank. Because CoCo bonds are “perpetual,” unless they are changed into equity or called by the institution that issued them, they never mature and can stay outstanding.

While AT1 bond investors may be able to earn a higher yield than the majority of other bonds from borrowers that have similar credit ratings, these investments are also riskier. Credit Suisse 7.500% Perpetual Corp AT1 bonds, specifically, also came with liquidity risks, counterparty risks in the wake of potential bankruptcy or other issues, exposure to political risks, and operational risks related to certain failures or catastrophic events.

Credit Suisse 7.500% Perpetual Corp AT1 bonds clearly have always been too risky for most inexperienced retail investors or conservative retiree investors. They may not even have been suitable for certain wealthy or accredited investors depending on their risk tolerance level, financial goals, age, and/or the rest of the assets in their portfolio. They have, however, been popular with institutional investors.

Why Work With Our CoCo Bond Fraud Lawyers?

At Shepherd Smith Edwards and Kantas, our team of savvy bond fraud lawyers is exclusively focused on representing investors. For more than 30 years, we have been going up against the largest Wall Street firms, including in some of the most high-profile kinds of securities cases, to secure damages for our clients. More than 90% of those we have represented have received full or partial financial recovery through arbitration, mediation, and litigation.

We have the resources, skillset, and knowledge to fight for you. Should we agree to work together, you will have our entire securities law firm, along with seasoned fraud analysts and other expert consultants, representing you and preparing/filing your FINRA arbitration claim seeking damages.

What is happening with Credit Suisse contingent convertible bonds is raising concerns about how this could affect both the AT1 bonds issued by other financial institutions and the global credit markets. If you suspect that your broker unsuitably recommended a Credit Suisse CoCo bond or another contingent convertible bond to you and/or downplayed the risks, you may have grounds for filing a broker fraud lawsuit for damages.

How Can You Contact Our Trusted Bond Fraud Law Firm?

Shepherd Smith Edwards and Kantas have represented thousands of investors, including inexperienced investors, senior retirees, accredited investors, high-net-worth investors, institutional investors, and others, to collectively recover many millions of dollars on their behalf in FINRA arbitration, mediation, and litigation.

To schedule your free, no-obligation case consultation, call (800) 259-9010 today.