Important Notice on Credit Suisse AT1 CoCos
21 March 2023
Affecting WisdomTree AT1 CoCo Bond UCITS ETF (the “Fund”)
- The Fund tracks the iBoxx Contingent Convertible Liquid Developed Europe AT1 Index. At the close of market on Friday 17th March 2023, the Fund had exposure to nine AT1 bonds issued by Credit Suisse representing 2.69% of net assets.
- On Sunday 19th March, the Swiss regulator FINMA2 announced “In close coordination with FINMA, the Swiss Confederation and the SNB (Swiss National Bank), UBS will take over Credit Suisse in full. The extraordinary government support will trigger a complete write-down of the nominal value of all AT1 debt of Credit Suisse in the amount of around CHF 16 billion, and thus an increase in core capital.”
- The index provider (Markit iBoxx) made the following announcement (at 5:32pm London, on Monday 20th March): “IHS Markit Benchmark Administration Ltd. (IMBA) confirms that the bonds will be written down and excluded from the iBoxx Contingent Convertible indices per the March 2023 month-end rebalance. In the interim, the price and the accrued interest of Credit Suisse's AT1 bonds is written down to zero (technically 0.00001) as of end-of-day 20 March 2023.”
- The Fund is taking the same actions as the index and will mark all the Credit Suisse AT1 bonds at zero, effective from 20th March.
- The Fund has been open for trading in both primary and secondary markets, throughout the morning and afternoon trading sessions on 20th March and remains open for trading.
Sources
1 AT1 CoCos refers to Additional Tier 1 Contingent Convertible bonds
2 FINMA – Swiss Financial Market Supervisory Authority https://www.finma.ch/en/news/2023/03/20230319-mm-cs-ubs/