Credit Suisse offers to buy debt securities for 3 billion Swiss francs
Credit Suisse Group AG is offering to buy up debt securities for a cash value of about 3 billion Swiss francs ($3 billion), just as the embattled lender tries to put the finishing touches on a planned overhaul.
“The transactions are consistent with our proactive approach to managing our overall liability mix and optimizing interest expense and allow us to take advantage of market conditions to buy back debt at attractive prices,” he said. he said Friday in a statement.
Credit Suisse is weeks away from announcing the results of a major strategic review, which is also expected to include asset sales or market exits across units. To add to the urgency of the scrutiny, the bank’s shares have lost more than half their value this year after falling to record lows in recent days. The price investors have to pay to insure the bank’s debt has also recently reached unprecedented levels.
Investors are worried about how the bank will cover the cost of its plan and what that would mean for its capital strength, especially during a time when the investment bank has suffered heavy losses. Credit Suisse had a CET1 capital ratio of 13.5% as of June 30, well above the international regulatory minimum of 8% and the Swiss requirement of 10%.
The Swiss government, meanwhile, has been working since March on a new law that would provide a public liquidity safety net for systemically important banks.
The debt repurchase offer includes a cash tender offer for eight senior debt securities denominated in euros or sterling for a total amount of up to 1 billion euros, according to the announcements. The bank is also pursuing a separate cash tender offer for twelve senior US dollar debt securities for an aggregate amount of up to $2 billion, it said.