Credit Suisse to buy back $3 billion in debt, sell hotel as credit fears persist

Signage hangs over the doorway of a Credit Suisse Group AG department in Zurich, Switzerland, on Sunday, Sept. 25, 2022. Inflation in Switzerland has greater than doubled for the reason that begin of the 12 months and the State Secretariat for Economic Affairs expects it to come in at a three-decade-high of three% for 2022. Photographer: Pascal Mora/Bloomberg through Getty Images

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Troubled financial institution Credit Suisse provided to buy back up to 3 billion Swiss francs ($3.03 billion) of debt securities Friday, as it navigates a plunging share worth and an increase in bets in opposition to its debt.

The Swiss lender additionally confirmed that it’s promoting its well-known Savoy Hotel in Zurich’s monetary district, prompting some hypothesis that it’s scrambling for liquidity.

In a press release Friday concerning the provide to repurchase debt securities, Credit Suisse mentioned: “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 market conditions to repurchase debt at attractive prices.”

It comes after Credit Suisse’s shares briefly hit an all-time low earlier this week, and credit default swaps hit a document excessive, amid market’s skittishness over its future.

The embattled lender is embarking on a large strategic overview beneath a brand new CEO after a string of scandals and danger administration failures, and can give a progress replace alongside its quarterly earnings on Oct. 27.

The most expensive of the scandals was the financial institution’s $5 billion publicity to hedge fund Archegos, which collapsed in March 2021. Credit Suisse has since overhauled its administration group, suspended share buybacks and reduce its dividend as it seems to shore up its future.

Shares closed at 4.22 Swiss francs on Thursday. They are down over 50% 12 months to date.

On Friday, the financial institution introduced a money tender provide relating to eight euro or sterling-denominated senior debt securities, value up to 1 billion euros ($980 million), together with 12 U.S. dollar-denominated securities value up to $2 billion. The gives on the debt securities will expire by Nov. 3 and Nov. 10, respectively.

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