Homburger advised Credit Suisse Group AG on its issuance of USD 2 bn 7.5 per cent. Perpetual Tier 1 Contingent Write-down Capital Notes
On July 9, 2018, Credit Suisse Group AG (Credit Suisse) launched, and on July 16, 2018 successfully completed, the issuance of USD 2 bn 7.5 per cent. Perpetual Tier 1 Contingent Write-down Capital Notes (the Notes). The Notes are “high trigger” regulatory capital instruments that are eligible to fulfill Credit Suisse’s Swiss going concern requirements.
The Notes constitute Credit Suisse’s first high-trigger regulatory capital instruments with a contingent write-down feature placed both with qualified institutional buyers in the United States in reliance on Rule 144A and outside the United States in reliance on Regulation S under the U.S. Securities Act. The Notes feature a full contractual write-down if (among other events) Credit Suisse’s consolidated common equity tier 1 capital falls below 7 per cent. of its consolidated risk weighted assets (a so-called “Contingency Event”). This means that, in the case of the occurrence of a Contingency Event, the Notes will be fully written-down prior to, or at the latest concurrently with, Credit Suisse’s other outstanding (high-trigger and low-trigger) regulatory capital write-down instruments. Since the Notes are eligible to fulfill Swiss going concern requirements, they also qualify for an exemption from the Swiss withholding tax that would normally be applicable to bonds directly issued by the Swiss-domiciled Credit Suisse. The Notes are cleared through DTC and are traded on the SIX Swiss Exchange.
Homburger advised Credit Suisse with respect to all aspects of Swiss law. The Homburger team was led by partner René Bösch (Capital Markets) and included partners Benjamin Leisinger (Capital Markets) and Dieter Grünblatt (Tax), as well as counsel Lee Saladino (Capital Markets) and associates Andreas Josuran and Andrea Ziswiler (both Capital Markets).