Credit Suisse plans to borrow up to SFr50bn ($54bn) from the Swiss central bank and buy back about $3bn of debt in an effort to boost its liquidity and calm investors, a day after the bank’s share price fell.
The Swiss National Bank said on Wednesday it was willing to provide a liquidity backstop to Credit Suisse after the troubled lender’s shares fell as much as 30 percent. The sell-off came after the chairman of Credit Suisse’s main shareholder, the Saudi National Bank, ruled out any further investment.
In a statement on Thursday, Credit Suisse said it had decided to “pre-emptively strengthen its liquidity” by borrowing funds from the SNB under a loan facility and a short-term liquidity facility.
The Zurich-based bank also said its international subsidiary Credit Suisse would repurchase some senior debt securities of the operating company for up to SFr3bn in cash. It plans to offer cash tenders for 10 US dollar-denominated senior debt securities worth up to $2.5bn and four euro-denominated senior debt securities worth up to €500mn.
These offers will end on March 22.
Chief executive Ulrich Koerner said the moves “represent decisive steps to strengthen Credit Suisse as we continue our strategic transformation”. Corner’s restructuring included selling part of Credit Suisse’s investment bank and cutting thousands of jobs.
The move is a bid by Credit Suisse to regain investor confidence after a series of scandals and setbacks rocked the Swiss bank and pushed its share price to record lows.
Shares in Credit Suisse closed down 24.2 per cent on Wednesday, pushing its market value below SFr7bn. Shares in the bank, which raised SFr4bn of capital just months ago, have fallen 39 per cent this year and 85 per cent over the past two years. Credit Suisse’s US-listed shares were trading up 5.6 percent in after-hours trading.