Bond giants Pimco and Invesco are facing losses of hundreds of millions on rotten Credit Suisse debt
Pimco and Invesco both suffered massive losses because they held the failed Swiss bank's Additional Tier 1 bonds, according to data fromFINMA, which is Switzerland's top financial regulator, marked the value of all Credit Suisse AT1s down to zero when UBS's takeover of the struggling bank was confirmed.
But the reason for those greater returns is that there's more risk attached to them – because the bank can choose to convert them into shares to prop up its capital and reduce its debt if its financial health falls beneath a certain level. Ten individual fixed-income funds also had over $100 million invested in the bank's AT1s, according to aFirst Trust, Nuveen, and Vanguard also had significant exposure to the CoCo bonds, that data shows.
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