-FED priced 50/50 on 25bps, ie 13bps
-Asian Markets were flat ish up to 2 hours ago or so
-Rates all over already early this morning, SFR +30 suddenly
-Bank credit in the open now..
-The Fed made joint announcement with BOE, ECB, BOC, BOJ and SNB to increase frequency of USD swap lines from weekly to daily.
-China delivered a 25bps cut in RRR starting 17Mar, Xi to visit Russia
-There will be question as to why shareholders get some and AT1 bond holders don’t..!! hierarchy etc etc .. more about it here : It is all about credit, particularly from here on.
And final CUBS deal it’s not a merger clearly .. more like a botched rescue
(Bloomberg) -- UBS Group AG agreed to buy Credit Suisse Group AG in a government-brokered emergency rescue announced on Sunday.
Under the terms of the deal, Credit Suisse shareholders will receive 1 UBS share for every 22.48 Credit Suisse shares held, equivalent to CHF0.76/share for a total consideration of CHF3 billion, UBS said in a statement
The price represents a 59% discount to Credit Suisse’s closing price on Friday, according to Bloomberg calculations
The takeover will create a global wealth manager with $5 trillion of invested assets across the group
Both banks can obtain a liquidity assistance loan with privileged creditor status in bankruptcy for a total amount of up to CHF100 billion
UBS is to get CHF25 billion downside protection from the transaction to support marks, purchase price adjustments and restructuring costs, and additional 50% downside protection on non-core assets
Colm Kelleher will be chairman and Ralph Hamers will be CEO of the combined entity
The combination is expected to generate annual run-rate of cost reductions of more than $8 billion by 2027
UBS remains “strongly capitalized well above our target of 13%” and is committed to progressive cash dividend policy
The Federal Council has established bankruptcy privilege rights for this additional liquidity assistance, which gives the SNB the necessary assurance to make available to Credit Suisse substantial additional liquidity
The extraordinary government support will trigger a complete write-down of the nominal value of all AT1 shares of Credit Suisse in the amount of around CHF16 billion, and thus an increase in core capital
The takeover will result in a larger bank, for which the current regulations require higher capital buffers
Swiss regulator FINMA will grant appropriate transitional periods for these to be built up
FINMA will very closely monitor the transaction and compliance with all requirements under supervisory law
FINMA will coordinate continuously with national and international authorities in this regard, namely the US Federal Reserve and the British Prudential Regulatory Authority
To ensure that all obligations can continue to be met at all times throughout the transaction, further liquidity assistance will be assured
This means that the banks involved will have substantial additional liquidity available to carry out the takeover
The liquidity provided by the SNB will include a loan covered by a federal guarantee