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Updated: Jun 8, 2023

- Lawsuit

- Breach of protection

- Case study

Singaporean Credit Suisse investors are not happy with the Swiss Government's decision to write down 17 Billion USD of Credit Suisse bonds as it violates a free trade agreement. According to law firm Wilmer Hale, the bondholders argue that the move breached protection against unfair state actions under Singapore-European Free Trade Association signed with the Swiss in 2003.

This would open up a new front legal battle against Switzerland for its decision to wipe out bonds as part of the government-initiated UBS takeover.

Law firms WilmerHale and Engelin Teh Practice are in talks with the plaintiff who are wealthy retail investors and family offices whose AT1 bonds were written off as part of the UBS acquisition deal.

AT1 bonds are ranked ahead of equity on the balance sheet. It is a class of debt fabricated to absorb losses in the scenario where institutions run into financial troubles.

The Investors have collectively invested about 70 Million USD in AT1 bonds. This initiative by Singaporean investors will likely cause the rest of the affected investors across other countries to join in the lawsuit.

Switzerland angered bond investors as they decided to take action against the Swiss Government for the decision to write down AT1 bonds to 0 and the emergency rescue deal. They were not happy with the deal which entitles and favours Credit Suisse shareholders to be paid by UBS. This goes against the hierarchy of claims.

Unlike the US, Asian countries have unique protections under multilateral treaties to protect foreign investments.

There are arguments that the Swiss Government breached this protection by acting contrary to investors' legitimate expectations regarding hierarchies of claims.

Case Study: Affected Singaporean AT1 Bond Investors

Other lawyers cautioned that the Singapore lawsuit is an uphill battle


Ruehl, M. (2023) Singapore bondholders prepare to sue Switzerland over Credit Suisse, Subscribe to read | Financial Times. Financial Times. Available at: (Accessed: April 20, 2023).

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