Credit Suisse said $17.24 billion Tier 1 debt will be written down to zero, while shareholders, who sit below bonds in the priority ladder for repayment in a bankruptcy process, will receive $3.23 billion under the UBS deal.
The move reflects authorities' desire to see private investors share the pain from Credit Suisse's troubles, sending $275 billion market for bank funding into a tailspin, while threatening blowback for European policy makers in crisis-fighting mode.