(Bloomberg) -- Some of Europe’s largest banks seized on the turmoil that engulfed Credit Suisse Group AG last week by facilitating billions of dollars in bond trading as investors bet on the Swiss lender’s fate.
Banks including Barclays Plc, BNP Paribas SA and Morgan Stanley have been among the most active in trading debt of the Swiss lender in recent days, which could translate into material gains for the desks provided they weren’t caught out by the volatility of the past few days, people familiar with the matter said.
Barclays traders traded more than $4 billion of bonds tied to Credit Suisse by the end of last week, around half of which was traded on Wednesday, according to people familiar with the matter. BNP Paribas traded more than $2.4 billion of Credit Suisse bonds last week, some of the people said.
By comparison, the average daily trading volume across all bonds issued by financial and bank entities in Europe for March so far has been around €3 billion ($3.2 billion), according to data from MarketAxess.
Representatives for Barclays, BNP Paribas and Morgan Stanley declined to comment.
Hedge Funds
Hedge funds scooping up the Swiss lender’s debt last week drove much of the trading flow, some of the people said, as they sought to capitalize on falling debt prices.
Funds that bought so-called additional tier 1 bonds — the riskiest in the debt stack — are facing steep losses after the takeover of the Swiss lender announced Sunday wiped out about 16 billion francs of the debt.
Goldman Sachs Group Inc. was quick to capitalize on the potential fallout with its traders preparing to take bids on claims against Credit Suisse in a bid that investors could recover some value, potentially through litigation, people with knowledge of the matter have said.
Read More: Goldman Readies Claims Trading for Wiped Out Credit Suisse Debt
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