News for hackers. Stuff that matters.

A comment on UBS Agrees to Buy Credit Suisse in Historic Deal to End Crisis. Parent comment

Re:UBS Agrees to Buy Credit Suisse in Historic Deal to End C... by jcfrei on Sunday March 19, 2023 @04:28PM (#35223210)
No, the 100B CHF is just to bridge the liquidity. If they didn't provide this then Credit Suisse might need to sell a big chunk of its bond portfolio for further withdrawals - which would incur a big loss compared to holding the bonds until maturity. Same issue and fix as for Silicon Valley Bank. I don't know the terms for accessing this emergency liquidity but I assume it's not going to be cheap.
[ Parent | on HN ]
Re:UBS Agrees to Buy Credit Suisse in Historic Deal to End C... by londons_explore on Sunday March 19, 2023 @04:55PM (#35223499)
At market rates, it should cost the same as selling the bonds now.

And selling the bonds now would put them in the red.

So either they have been given better-than-market rates, or they're pulling some other accounting trick to make it look like there is more of value here than there really is...

[ Parent | on HN ]
Re:UBS Agrees to Buy Credit Suisse in Historic Deal to End C... by bartvk on Sunday March 19, 2023 @05:10PM (#35223685)
> At market rates, it should cost the same as selling the bonds now.

You assume that the spread is zero and that there are actually buyers. But I might be wrong here, I don't know about the liquidity of these bonds.

[ Parent | on HN ]