Credit Suisse has announced this Thursday that it will borrow up to 50,000 million francs (about 50,750 million euros) from the Swiss National Bank (SNB) to strengthen its liquidity in a preventive manner, as reported by the Swiss entity, which has highlighted that this additional liquidity “it would support the businesses and their core customers.”
The bank, which yesterday suffered a collapse in its shares of more than 20%, has also announced the launch of an offer by Credit Suisse International to repurchase certain senior debt securities for up to approximately 3,000 million francs (3,045 million euros).
“These steps demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders,” said Credit Suisse CEO Ulrich Koerner, who expressed his thanks to the SNB and Finma.
In this sense, the entity has indicated that the additional liquidity through the central bank will support the main businesses and clients, while Credit Suisse takes the necessary measures to create a simpler bank focused on the needs of clients.
In addition, Credit Suisse has also announced that it is making a public offer for the acquisition in cash of a dozen senior debt securities denominated in US dollars for a consideration of up to 2,500 million dollars (2,349 million euros), as well as another offer for senior debt securities denominated in euros for a total consideration of up to 500 million euros.
Both offers, subject to various conditions set out in the respective public offering memorandums, are due to expire on March 22, 2023, and the bank has underscored that they are consistent with its proactive approach to managing overall liability composition and optimizing interest expense, making it possible to take advantage of current trading levels to repurchase debt at attractive prices.
The announcement of these measures comes after the Swiss National Bank and the Swiss Financial Markets Supervisory Authority (known by the acronym FINMA), the Swiss country’s central bank and financial regulator, respectively, stated yesterday that they will provide liquidity to Credit Suisse “If necessary”.
“If necessary, the SNB will provide liquidity to Credit Suisse,” both organizations assured this Wednesday. “Strict capital and liquidity requirements for Swiss financial institutions ensure their stability. Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks,” they added.
Both organizations defended that the financial instability resulting from the collapse of Silicon Valley Bank (SVB), Signature Bank or Silvergate does not pose “a direct contagion risk for Swiss entities”.
FINMA also certified that it is in “close contact” with Credit Suisse and reiterated that it complies with the regulations applicable to large banks.