Credit Suisse has sold CHF 220m (220 million Swiss francs) worth of bonds to help insure against certain operational risks such as cybercrime and rogue trading; holders of the bond are paid a coupon but do carry the risk of having their investments wiped out if Credit Suisse is hit by losses caused by operational problems. The operational risk bond is similar in structure to a catastrophe bond, in which investors lose some or all of their principal if a specified natural catastrophe, such as an earthquake, occurs.
Credit Suisse has sold CHF 220m ($222m) worth of bonds to help insure against certain operational risks such as cybercrime and rogue trading; holders of the bond are paid a coupon but do carry the risk of having their investments wiped out if Credit Suisse is hit by losses caused by operational problems. The operational risk bond is similar in structure to a catastrophe bond, in which investors lose some or all of their principal if a specified natural catastrophe, such as an earthquake, occurs.