Credit Suisse to borrow up to $54 billion from Swiss central bank
Geneva, Mar 16 (EFE).- Credit Suisse is to borrow up to 50 billion Swiss francs (about $54 billion) from the Swiss central bank to shore up its liquidity, it said early Thursday.
The bank experienced its blackest trading day on Wednesday, losing a quarter of its stock value with its shares dropping to a historic low, falling below 2 Swiss francs ($2.16) for the first time.
“Credit Suisse is taking decisive action to pre-emptively strengthen its liquidity by intending to exercise its option to borrow from the Swiss National Bank (SNB) up to CHF 50 billion under a Covered Loan Facility as well as a short-term liquidity facility, which are fully collateralized by high quality assets,” it said in a statement.
In addition, it announced “offers by Credit Suisse International to repurchase certain OpCo senior debt securities for cash of up to approximately CHF3 billion ($3.2 billion).”
The SNB had said Wednesday that it would provide liquidity to Credit Suisse if necessary, but assured that the bank complies with the strict liquidity and capital requirements that are required of all Swiss financial institutions to guarantee their stability.
Credit Suisse also announced that it has made a cash tender offer in connection with 10 US dollar-denominated senior debt securities for total consideration of up to $2.5 billion.
At the same time, it reported a separate cash tender offer in relation to four Euro-denominated senior debt securities for total consideration of up to €500 million.
The offers will expire on Mar. 22.
“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 trading levels to repurchase debt at attractive prices,” the Swiss entity added.
Credit Suisse asked the SNB and the Swiss Financial Market Supervisory Authority (FINMA) the previous day to make a strong statement of support to calm the markets after three United States banks collapsed in a week.
The institutions issued a joint statement saying that “problems of certain banks in the USA do not pose a direct risk of contagion for the Swiss financial markets.”
The large European stock markets experienced an all-time low for a second consecutive day Wednesday, this time after the refusal of the Credit Suisse’s top investor to contribute more capital. EFE