Credit Suisse Group AG Inc has offered to buy back approximately $3 billion of its debt background to the concerns on the financial health of the Swiss bank, which had depressed its share price and led to an increase in bets against its debt.
What happened: Credit Suisse shares briefly hit an all-time low on Monday, while its credit default swaps hit a record high amid market concerns about the bank’s future. However, as the panic subsided, the cost of insuring the bonds fell sharply on Tuesday from the previous day’s close, in sync with a recovery in the company’s shares. reported Reuters.
Shares of the lender traded 2.94% higher in Switzerland on Friday.
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The offer: The lender announced in a statement that it is making a cash tender offer in respect of eight euro or sterling denominated senior debt instruments for an aggregate consideration of up to EUR 1 billion.
At the same time, Credit Suisse is announcing a separate cash offer for 12 US dollar-denominated senior notes for an aggregate purchase price of up to US$2 billion.
Credit Suisse said the offers expire on November 3 and 10, respectively, subject to the conditions set out in the offer documents.
“The transactions are consistent with our proactive approach to managing our total liability mix and optimizing interest expense, and allow us to take advantage of market conditions to buy back debt at attractive prices,” the Swiss bank said.
strategy review: Credit Suisse recently announced it was in the process of a strategy review that included potential divestitures and asset sales.
The strategic review aims to strengthen Credit Suisse’s wealth management business and transform the investment bank into a capital-poor, advice-led banking business with a stronger focus on markets.
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