(Adds details)
LONDON, March 20 (Reuters) - The Bank of England joined
other European regulators on Monday in saying that shareholders
of failed banks should bear losses ahead of holders of
Additional Tier 1 bonds after the structure of Credit Suisse's
rescue in Switzerland angered bondholders.
Some 16 billion Swiss francs ($17.24 billion) of Credit
Suisse's AT1 debt will be written down to zero on the orders of
Swiss regulators as part of the bank's emergency takeover by UBS .
That means Credit Suisse's AT1 bondholders appear to be left
with nothing while shareholders, who typically sit below bonds
in the priority ladder for repayment, will receive $3.23 billion
under the UBS deal.
The BoE confirmed that in Britain, holders of common equity
tier 1 instruments - shares - should expect to suffer losses
before AT1 bondholders.
"Holders of such instruments should expect to be exposed to
losses in resolution or insolvency in the order of their
positions in this hierarchy," the BoE said in a statement.
The British central bank said this was the approach used in
its resolution this month of Silicon Valley Bank UK.
(Reporting by Kylie MacLellan, Writing by Andy Bruce; Editing
by William Schomberg and Kate Holton)
Messaging: @brucereuters))
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