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Credit Suisse to borrow up to $54 bln from Swiss National Bank

AuthorAmbar Warrick
Published 03/15/2023, 09:37 PM
Updated 03/15/2023, 09:42 PM
© Reuters.

By Ambar Warrick

Investing.com -- Embattled Swiss lender Credit Suisse Group AG (SIX:CSGN) (NYSE:CS) said on early-Thursday that it will exercise an option to borrow up to 50 billion Swiss francs ($53.68 billion) from the Swiss National Bank under two loan facilities to shore up liquidity conditions.

The bank said the option will include a covered loan facility, as well as a short-term liquidity facility, as it moves to “preemptively strengthen liquidity.” 

The bank also said it will open a cash tender offer to repurchase ten dollar-denominated debt securities for up to $2.5 billion, and a separate tender offer for euro-denominated debt securities for up to €500 million. 

The move comes after the bank’s shares plummeted to a record low on Wednesday as its top investor, Saudi National Bank (TADAWUL:1180), said it was unable to provide more funding to the lender. 

“These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders,” Credit Suisse CEO Ulrich Koerner said in a statement.

The Swiss National Bank had also pledged support for the lender on Wednesday.

Investors were largely skittish over any further ructions in the banking sector, after the collapse of three U.S. regional banks, most notably Silicon Valley Bank, drummed up concerns of a broader crisis. 

Credit Suisse faced increased scrutiny after it flagged “material weakness” in its internal controls over financial reporting, and that it was still facing a deluge of customer outflows. 

This also came after the bank saw a string of scandals in recent years, including accusations of corporate espionage, money laundering, and exposure to the Archegos scandal. 

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The bank is now undertaking restructuring measures to “deliver a simpler and more focused bank.” 

Still, the news of more liquidity helped ease some concerns over an imminent banking crisis. U.S. stock futures rose after the announcement, with Dow Jones futures trading up 0.3%.

Asian stocks also pared some earlier losses, with Japan’s Nikkei 225 now trading down 0.8% after losing as much as 1.7%. 

 

Latest comments

Great ......with. the $54bln loan Credit Suisse can start demanding default loan payments and compound interest from recently lay off workers or the jobless
Chuck me a few bucks while you're at it....I'm insolvent too.
Print more$
Is this a bailout?
It's a loan
what interest rate?
Like the 30 trillion loan America is on the hook for that can never be repaid?
That bank must deliver two things, security and liquidity. For high returns theire are other solutions.
stop buying else u loose money
Joe Biden corruption destroying everything he touches.
jzut seriously? this is tom posting abt biden, not me.. if you wanna play the blamegame, at least point in the right direction..
Proof? We don't need no stinking proof. Fantasy is the refuge of those who are not equipped to confront reality.
OOPPPS Sorry. Hit the wrong link. Yes to Tom.
the money then used by a board for corruption and everything they wants.. commisioner, director, they buying a lot of luxury stuff. so what benefit for customer????
Is it just liquidity issue? Thank further, all banks got tremendous deposits in the past years when interest rate were very low and FED QE kept printing money. To profit from the deposits, banks just loan those money to like mortgage lenders, cooperate lenders etc. for 2-4%, or simply by note/tips with 0.5-2% return which was still far higher than the interest paid to clients. Since FED starting rollback QE, stop buying loans from bank, and increase interest rate, there are far less deposits now, instead there are more and more withdraws due to job loss, business investment and far less corp investors. How banks pay those withdraws? The only way is to sell their loans with a huge lose. Anyway, it is just a time issue before majority of the banks run into the SIVB crisis and FED no longer has the capacity to save the bank failures. China saved US last time during the CDS crisis. But no one will save US this time.
The Chinese Communist party has no influence on this. They have only tried to make peace between Saudis and Iran. They did not influence Saudi National Bank to pull out and cause this turbulence. CCP is innocent
smells like crime and looks like crime... definitely crime.
it's not banking crisis. all banks perform well this year. ecb and fed just focus on liquidity.
keep buying in Perma bulls lol
Swiss National Bank very likely has the same issue as CS. This is a general problem in pretty much all the banks. But time will tell. When Swiss National Bank sink, both die.
lol you nuts? doomsayer
. ha ha.. all bank do well. nothing to worry. it just liquidity issue not recession or crisis. market do well this year
Four bank failures and stocks have barely moved. Bailouts aren't supposed to be an indicator of healthy markets
they haven't been healthy for decades? juiced up markets
what do you want them to do, tank?
they have the way to save swiss bank tomorrow it's a good day for Dow
doomed bank
Something tells me that markets will still close the day or week in red, the collaps has exlerated with more institutions to follow, first it was evergrand , then jiob cuts in tech sector, now banks, we still have a long way to go.
that's great news....
nothing more to see here, you can all go home now..
DB to get nuked next
Mental Biden the president of us
See you at 4200 SP this week
Bailouts for everyone! Except the poor, of course.
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