This deal stinks of panic. I know they’re rushing to calm the market but I think it will have the opposite Streisand effect. Last week it was 30B CHF now they’re throwing 100B CHF to make it work? Something is terribly wrong with CS book.
The purchase price is 3B CHF.
And selling the bonds now would put them in the red.
So either they have been given better-than-market rates, or they're pulling some other accounting trick to make it look like there is more of value here than there really is...
You assume that the spread is zero and that there are actually buyers. But I might be wrong here, I don't know about the liquidity of these bonds.
There were likely internal (to CS) marks based on assumptions. The assumptions may have assumed baseline market conditions. External parties came in and didnt want to assume baseline market conditions and/or didnt agree with the assumptions, so they were changed to more conservative figures, and new marks came out. The new marks were significantly lower. They have veto power over the deal and the government was forced to backstop to make the deal happen.
Edit: and now CBs come out with additional coordinated measure.
They’re clearly insolvent without this, no? The Swiss government forced UBS to do this at gunpoint, why else would they do that