Goldman Restores View on Europe Bank Debt on Credit Suisse News
- Goldman returns to overweight on sector as merger eases risks
- Warns about AT1 notes as rout spreads to Asia on Monday
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Goldman Sachs Group Inc. strategists upgraded European bank debt back to overweight, reversing an earlier decision even as a rout in lenders’ riskiest bonds continued in the wake of Credit Suisse Group AG’s bailout.
A so-called neutral weighting on the sector is no longer warranted as UBS Group AG.‘s takeover would provide clarity on Credit Suisse’s future path, Goldman strategists including Lotfi Karoui wrote in a note Sunday. But they warned that sentiment toward Additional Tier 1 bonds, the riskiest form of bank debt, may remain weak after a Swiss regulator said $17 billion of such notes from Credit Suisse will be wiped out.