Currently, mainstream media reporting of the writedown of Credit Suisse AT1 bonds seems to be missing an extremely important fact about how the bonds are structured - they are designed to be written down before equity, they have a trigger to be zeroed if the capital ratio (CET1) falls below 7%. So they were written down as they were designed; it was not Swiss regulators imposing arbitrary losses on bondholders.

Resolution

At the end of March, I will google for "credit suisse bonds" and read the top result that is related to the writedown of the AT1 bonds. Resolves YES if it mentions the 7% CET1 trigger at all, and NO if it doesn't.

Background

Matt Levine https://www.bloomberg.com/opinion/articles/2023-03-20/ubs-got-credit-suisse-for-almost-nothing explains well how Credit Suisse's AT1 bonds work:

If the bank’s common equity tier 1 capital ratio — a measure of its regulatory capital — falls below 7%, then the AT1 is written down to zero: It never needs to be paid back; it just goes away completely.

investors seem to think that AT1s are senior to equity, and that the common stock needs to go to zero before the AT1s suffer any losses. But this is not quite right. You can tell because the whole point of the AT1s is that they go to zero if the common equity tier 1 capital ratio falls below 7%.

This, again, is very explicitly the whole thing that the AT1 is supposed to do, this is its main function, this is the AT1 working exactly as advertised. But notice that in this simple example the bank has $950 million of assets, $850 million of liabilities and $100 million of shareholders’ equity. This means that the common stock still has value. The common shareholders still own shares worth $100 million, even as the AT1s are now permanently worth zero.

On the other hand, if I google for "credit suisse bonds" right now the first result is https://www.cnbc.com/2023/03/20/17-billion-of-credit-suisse-bonds-worthless-following-ubs-takeover.html which says

The move has angered Credit Suisse AT1 bondholders as their investments have seemingly been lost, while shareholders will receive payouts as part of the takeover. Usually, equity investments would be classed as secondary to AT1 bonds.

Therefore, the decision “can be interpreted as an effective subordination of AT1 bondholders to shareholders,” Goldman Sachs’ credit strategists said in a research note published Sunday.

Almost all media reporting I've seen is like this - it doesn't mention the 7% CET1 trigger at all, that the AT1 bonds are designed to work like this.