What credit event did the EMEA CDDC rule did not occur?

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The EMEA CDDC Ruled a Governmental Intervention Credit Event Did Not Occur

Holders of credit insurance linked to Credit Suisse bonds will not receive a payout following a ruling by the EMEA Credit Derivatives Determination Committee (CDDC). The committee adjudicated that a Governmental Intervention Credit Event did not occur in relation to the bank's state-engineered merger with UBS. This decision means that credit default swaps (CDS) tied to Credit Suisse bonds will not be triggered for payment.
Ruling on Credit Suisse AT1 Bonds

The CDDC's determination was based on an examination of the ranking clauses for Credit Suisse's Additional Tier 1 (AT1) bonds. An investor had inquired whether these AT1 bonds were pari passu, meaning they ranked at the same level, as the reference bond underlying the CDS contracts, specifically a subordinated bond that matured in 2020. The committee's analysis concluded that AT1 bondholders were not pari passu with the reference bond, as holders of the 2020 bonds were considered priority creditors.
Unanimous Decision by Committee Members

The decision by the EMEA CDDC was unanimous among the eleven finance companies that comprise the panel. These members include prominent institutions such as Barclays, Citibank, Deutsche Bank, and Goldman Sachs, as well as investment firms like Elliot Investment Management and PIMCO. Credit Suisse, though listed as a member of the EMEA CDDC, did not participate in this specific decision.
Implications for the AT1 Market

The ruling is significant for the broader AT1 market. The CDDC's conclusion that subordinated Tier 2 and AT1 bonds were not pari passu with certain other debt instruments was seen by market observers as a pragmatic outcome. This clarification is considered important for maintaining the integrity and predictability of the AT1 market, which saw substantial disruption following the Swiss regulators' decision to write down Credit Suisse's AT1 bonds. The total notional amount of CDS linked to Credit Suisse bonds exceeded US$19 billion in March.

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What credit event did the EMEA CDDC rule did not occur?

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