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Credit Suisse to borrow up to $54bn from Swiss central bank

Credit score Suisse plans to borrow as much as SFr50bn ($54bn) from the Swiss central financial institution and purchase again about $3bn of its debt, in an try to spice up its liquidity and calm buyers a day after the financial institution’s share value plummeted.

The Swiss Nationwide Financial institution had stated on Wednesday it was prepared to supply a liquidity backstop to Credit score Suisse after the troubled lender’s shares fell as a lot as 30 per cent. The sell-off got here after the chair of the Saudi Nationwide Financial institution, a significant Credit score Suisse shareholder, dominated out any additional funding.

In an announcement on Thursday, Credit score Suisse stated it had taken the choice “to pre-emptively strengthen its liquidity” by borrowing the funds from the SNB underneath a mortgage facility and a short-term liquidity facility.

The Zurich-based financial institution additionally stated its worldwide subsidiary would repurchase a few of the Credit score Suisse working firm’s senior debt securities in money for as much as SFr3bn. It plans to make a money tender supply for 10 US dollar-denominated senior debt securities value as much as $2.5bn and 4 euro-denominated senior debt securities value as much as €500mn.

The affords will expire on March 22.

Chief government Ulrich Körner stated the measures “show decisive motion to strengthen Credit score Suisse as we proceed our strategic transformation”. Körner’s restructuring has included promoting off part of Credit score Suisse’s funding financial institution and slicing 1000’s of jobs.

The transfer is the most recent try by Credit score Suisse to regain investor confidence after a sequence of scandals and setbacks have rocked the Swiss financial institution and pushed its inventory value all the way down to a file low.

Credit score Suisse shares closed down 24.2 per cent on Wednesday, pushing its market worth under SFr7bn. Shares within the financial institution, which raised SFr4bn of capital just some months in the past, are down 39 per cent this yr and 85 per cent over the previous two years. Credit score Suisse’s US-listed shares had been buying and selling up 5.6 per cent in after-hours buying and selling.