Credit Suisse seeks to bolster investor confidence with $3 billion debt buyback

ZURICH (Reuters) – Struggling Credit Suisse said on Friday it had made an offer to buy senior debt securities of up to 3 billion Swiss francs ($3 billion), in a bid to ease investor concerns ahead of its strategic review later this month.

Shares and bonds of the lender have plunged this week amid concerns over its ability to restructure the business without asking for more money.

“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 repurchase debt at attractive prices,” the bank said. in a press release.

Switzerland’s second-largest bank has announced it is making a €1 billion cash tender offer for eight senior debt securities denominated in euros or sterling and another takeover bid for 12 securities. senior debt denominated in US dollars for a maximum of 2 billion dollars.

The bank’s executives spent the weekend reassuring major clients, counterparties and investors about its liquidity and capital. Chief executive Ulrich Koerner also told staff in a memo that he has strong capital and liquidity.

Credit Suisse, a global systemically important bank and one of Europe’s largest banks, had to raise capital, suspend share buybacks, cut its dividend and reorganize its management after losing more than 5 billion dollars following the collapse of investment firm Archegos in March 2021, when it also had to suspend client funds linked to failing financier Greensill.

The bank is due to present its new business strategy on October 27, when the third quarter results are announced.

Ratings agency Moody’s Investors Service expects Credit Suisse’s losses to hit $3 billion by the end of the year, which could push its capital base below the key 13% level, Moody’s senior analyst on the bank told Reuters.

The bank has been working on possible asset and business sales in an effort to return to profitability.

On Thursday he announced he was looking to sell his famous Savoy hotel in the heart of Switzerland’s financial district, a deal which local media said could fetch around 400 million francs.

($1 = 0.9897 Swiss francs)

(Reporting by John Revill; Editing by Edwina Gibbs)

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