Paris (awp/afp) – The asset management company Lazard Frères Gestion suffered a loss of 142 million euros in the takeover of Credit Suisse by UBS which caused the cancellation of certain debt securities, according to a statement transmitted to AFP by the company following initial press information.
As of March 14, the beginning of the debacle and strong fears of bankruptcy of Credit Suisse, Lazard Frères Gestion held a total of 142 million euros of so-called “AT1” debt securities issued by the Swiss banking group, which represents only 0.4% of the total assets managed by the subsidiary of the Franco-American investment bank Lazard.
The takeover of Credit Suisse by UBS led to the cancellation of 17 billion dollars of these debt securities, the “CoCos” (for “Contingent Convertible”), also called “Additional Tier 1” or “AT1”, held by professional investors (banks, funds).
Created following the 2008 financial crisis, this category of debt, which comes last in the order of priority for reimbursement in the event of financial difficulties, aimed to strengthen the level of solvency without issuing new shares, and thus to prevent the taxpayer ends up footing the bill in the event of a bailout.
The daily Les Echos had advanced earlier in the day the amount of 107 million euros of AT1 securities held by Lazard Frères Gestion, citing data provided by the company specializing in financial information Morningstar.
The asset management company also specifies that it owns “Senior bonds” whose reimbursement is not affected by the merger with UBS, and that it does not hold “neither at the end of 2022, nor more recently” Credit Suisse shares, of which the price fell 66% in less than two weeks.
Bond investment fund Pimco (Pacific Investment Management Company) is the largest holder of Credit Suisse AT1 bonds, with $807 million in its portfolios, according to data from financial news agency Bloomberg.
A small share in the middle of the 1.740 billion dollars managed by this American company, a subsidiary of the German insurer Allianz.
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