Although UBS’s emergency takeover of Credit Suisse was required to prevent a financial collapse, at least one group is extremely upset with the way the deal turned out.

Investors owning Credit Suisse’s additional tier-one bonds worth $17 billion were horrified to learn that their holdings were now only worth…$0. The transaction completely destroyed the value of the bonds.

Short history: After the 2008 financial crisis, additional tier-one bonds, or AT1 bonds for short, were created to lessen the risk that taxpayers would have to save a failing bank. Although AT1s are seen as riskier assets, they also have higher potential rewards.

But why are these bondholders so furious if they were aware of the danger they were taking? mostly because they lost everything in this odd deal while shareholders didn’t. Normally, the sequencing of events doesn’t go like that:

Traditionally, losses to shareholders come before losses to bondholders when a write-down occurs.
This transaction upended the status quo, and furious AT1 bondholders are currently conferring with attorneys about possible legal action.
Major picture Not only have AT1 bondholders criticized the Swiss government’s handling of the UBS-Credit Suisse transaction but also parliamentarians from Switzerland’s two largest political parties and international banking regulators