April 15, 2024

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Credit Suisse to buy back $3 billion of debt securities

Credit Suisse to buy back $3 billion of debt securities

Signs hang at the entrance to a branch of Credit Suisse Group AG in Zurich, Switzerland, on Sunday, September 25, 2022. Inflation in Switzerland has more than doubled since the start of the year and the State Secretariat for Economic Affairs expects it to come in at a three-decade high of 3% for 2022. Photographer: Pascal Mora/Bloomberg via Getty Images

Bloomberg | Bloomberg | Getty Images

Troubled Credit Suisse offered to buy back up to 3 billion Swiss francs ($3.03 billion) of debt securities on Friday, as it deals with a falling share price and increasing bets against its debt.

The Swiss lender is also looking to sell the popular Savoy Hotel in Zurich’s financial district, according to reports on Thursday, fueling market speculation that it is heading towards cash.

In a statement issued Friday regarding the debt repurchase offer, Credit Suisse said: “The transactions align with our proactive approach to managing our overall liability formation and optimizing interest expense and allow us to take advantage of market conditions for attractive debt buybacks.”

It comes after Credit Suisse shares briefly hit an all-time low earlier this week, and default swaps hit a record high, amid market vacillation over its future.

The beleaguered lender is Initiating an extensive strategic review Under the leadership of a new CEO after a series of scandals and Risk management failureand will provide a progress update along with its quarterly earnings on October 27.

The most costly scandal was the bank’s $5 billion exposure to hedge fund Archegos, which collapsed in March 2021. Since then, Credit Suisse has reformed its management team, halting share buybacks and cutting dividends, as it looks to shore up its future.

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Shares closed at 4.22 Swiss francs on Thursday. It’s down over 50% so far.

On Friday, the bank announced a cash tender offer for eight euros or large pound-denominated debt securities, worth up to one billion euros ($980 million), along with 12 dollar-denominated securities worth up to two billion dollars. Offers on debt securities will expire by November 3 and November 10, respectively.

This is a breaking news story and will be updated soon.