Hedge funds eye opportunities in cut-price Credit Suisse AT1s

LONDON, March 21 (Reuters) – Distressed debt investors and large hedge funds are buying up Credit Suisse (CSGN.S) additional tier-1 bonds at rock-bottom prices after they were written down to zero in the Swiss bank’s rescue by cross-town rival UBS (UBSG.S). Under the UBS deal, the Swiss regulator determined that Credit Suisse’s AT1 bonds with a notional value of 16 billion Swiss francs ($17.35 billion) would be wiped out, a decision that stunned global credit markets and angered many holders of the debt, who believed they would be better protected than shareholders. AT1 bonds, which can convert to equity, rank…