Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

WSJ: "Some bondholders are thinking about challenging the wipeout. "What investors look at when they are investing is certainty of process and rule of law. That has just been swiped away in one fell swoop by Switzerland, " said Natasha Harrison, managing partner at law firm Pallas, which is assembling an investor group for potential litigation.

The write-down "could lead to contagion for wholesale funding costs across the sector," JPMorgan analysts said in a research note Tuesday. "We expect that credit investors are now likely to demand a higher risk premium across the spectrum, with cost of AT1 issuance potentially rising into double digits," they wrote.

Over the past year, banks have typically issued such bonds paying annual percentage interest rates of mid-to-high single digits.

Market pricing initially appeared to back that position. The value of most AT1 bonds inched back up Tuesday along with global bank stocks, but most prices remained substantially below levels from before Credit Suisse's implosion.

Some fund managers said they aren't likely to invest in Swiss bank AT1s because of how bondholders were treated.

"We wouldn't be too willing to bet on those terms, there is too much uncertainty," said Artaud Caloni, a credit portfolio manager at Meeschaert Asset Management."