Contagion: Chain Reactions and the CoCo Powder Keg
Many Happy Returns
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Credit Swiss's Risk Is $17 Billion Bonds Are Now Worthless
There are lots of lawsuits, which I believe are still ongoing with credit Swiss because of its failures and risk management in the past. And you shouldn't underestimate how popular these cocoa's were because they were offering really high yields for seemingly little risk when we had a very yield-starved period. So a lot of people piled into these. But also, if you've got this kind of bail-in capital, then I'd insist that it was triggered. If I'm a cocoa bond holder, I'm annoyed here because equity hasn't gone to zero. It's had a massive haircut, but they're getting something whereas cocoa has literally been put to zero by the regulator.
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