In order to prevent the spread of a banking crisis and alleviate financial disruptions to restore market confidence，UBS reached an agreement to acquire Credit Suisse AG for 3 billion Swiss francs on March 19 with the assistance of the Swiss government. To facilitate UBS's acquisition of Credit Suisse，the Swiss National Bank provided liquidity support of 100 billion Swiss francs along with a loss guarantee capped at 9 billion Swiss francs. Meanwhile，Swiss financial markets regulator  FINMA stated that other Additional Tier 1 (AT1)bonds with a nominal value of approximately 16 billion Swiss francs would be written down completely. This move sparked a lot of discussion in the market. On March 23，in a statement，FINMA explained the rationale behind the full write-down of Credit Suisse’s AT1 bonds and the regulatory requirements for AT1 bonds under Swiss law. However，it still triggered a heated debate on whether it is reasonable for AT1 bonds to be written down before equity.

Introduction to AT1 Bonds

Basic Concept of AT1 Bonds

AT1 bonds belong to a category of assets known as contingent convertible bonds，or CoCos. They are convertible bonds designed as capital instruments under the European regulatory framework after the 2008 global financial crisis. The purpose of AT1 bonds is to help banks absorb losses in the event of a bankruptcy crisis，thereby reducing the financial burden on taxpayers and governments.