Credit Suisse plans to borrow up to SFr50bn ($54bn) from the Swiss central bank and buy back about $3bn of its debt, in an attempt to boost its liquidity and calm investors a day after the bank’s share price plummeted.
The Swiss National Bank had 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 per cent. The sell-off came after the chair of the Saudi National Bank, a major Credit Suisse shareholder, ruled out any further investment.
In a statement on Thursday, Credit Suisse said it had taken the decision “to pre-emptively strengthen its liquidity” by borrowing the funds from the SNB under a loan facility and a short-term liquidity facility.
The Zurich-based bank also said its international subsidiary would repurchase some of the Credit Suisse operating company’s senior debt securities in cash for up to SFr3bn. It plans to make a cash tender offer for 10 US dollar-denominated senior debt securities worth up to $2.5bn and four euro-denominated senior debt securities worth up to €500mn.
The offers will expire on March 22.
Chief executive Ulrich Körner said the measures “demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation”. Körner’s restructuring has included selling off a part of Credit Suisse’s investment bank and cutting thousands of jobs.
The move is the latest attempt by Credit Suisse to regain investor confidence after a series of scandals and setbacks have rocked the Swiss bank and pushed its stock price down to a record low.
Credit Suisse shares closed down 24.2 per cent on Wednesday, pushing its market value below SFr7bn. Shares in the bank, which raised SFr4bn of capital just a few months ago, are down 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 per cent in after-hours trading.