Pimco, Invesco Face Biggest Losses on Risky CS Bonds

The video discusses the impact of the UBS takeover on AT1 bondholders, highlighting significant losses for major holders like PIMCO and Invesco. It explores market reactions, including trading activities and potential legal actions to recover value. The Swiss law's unique approach to bond write-downs led to a rally in European AT1 bonds, raising questions about the future of these financial instruments and investor confidence.

Which major financial institutions were significantly affected by the UBS takeover due to their bond holdings?

• PIMCO and Invesco

• Goldman Sachs and Morgan Stanley

• JP Morgan and Citibank

• Wells Fargo and Bank of America

What action are some bondholders considering in response to the regulator's decision to write off the debt?

• Filing a lawsuit

• Selling all their bonds

• Investing in more bonds

• Ignoring the decision

What was the market's reaction to the news about the Swiss law on bond write-downs?

• There was no significant change

• The market remained stable

• The market crashed

• European 81 bonds rallied off the lows

What is a key difference between Swiss law and other European laws regarding bond write-downs?

• Swiss law is identical to other European laws

• Swiss law prohibits any write-downs

• Swiss law allows permanent write-downs

• Swiss law requires government approval for write-downs

What existential question does the situation raise about Additional Tier 1 bonds?

• Whether they will continue to exist

• Whether they will be renamed

• If they will become more popular

• If they will be banned worldwide