Credit Suisse shares up after borrowing $54 billion from the Swiss National Bank
Credit Suisse (CS) shares recovered much of the lost ground yesterday after the company said it will borrow CHF 50 billion (about $54 billion) from the Swiss National Bank to stave off a liquidity crisis.
It announced the plan hours after a statement of support from Swiss authorities, and shares rose 20% after falling 24% the day before.
“This additional liquidity would support Credit Suisse’s core businesses and customers as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around customer needs,” the company said.
Credit Suisse has also offered to buy back up to $2.5 billion of dollar-denominated debt and 500 million euros ($530 million) of euro-denominated debt.
“The transactions are consistent with our proactive approach to managing our overall liability composition and optimizing interest expense and allow us to take advantage of current levels of trading to repurchase debt at attractive prices,” the company said. .
The Zurich-based lender admitted in its 2022 annual report published Monday to “material deficiencies” in its internal controls and financial reporting. Since then, Credit Suisse stocks and the US-listed American Depository Receipt have lost value due to liquidity problems.
Investor confidence took another hit on Wednesday after Credit Suisse’s largest shareholder, Saudi National Bank, refused to bail it out. Credit Suisse ADRs closed 14% in trading.