Sounds like a good deal if you can get it. Not for the AT1 bondhodlers of course.
Another way to describe it is that the write down of the AT1 bonds makes the deal possible.
From a consumer standpoint, the question is really how well the actual risk of the bonds was communicated, it sounds like the contract was executed as written.
In this case the CSFB AT1 bonds were written down to zero value and the equity holders got something.
Again, I have no opinion on if this is legal or even right. Some simply didn't expect this outcome, rightly or wrongly.
Credit Suisse’s debt-issuance documents seem to allow for stockholders coming out on top. They note that at1 bond buyers have waived any right to reimbursement in a “write-down event”. Yet the idea that stockholders may be left with something and coco holders with nothing is contrary to the understanding many buyers had about what they were purchasing: namely, a hybrid security somewhere between stocks and debt in the stack of capital.
That's a bad situation if retail investors were sold those contracts without careful explanation. Sophisticated investors can enjoy their cake.
Whether UBS made any profit on the deal or not heavily depends on how much CS's book is worth. If it's worth more than the deposits, it's a good deal for them. Given the crap that CS invested in, it may be worth much less than bank's liabilities.