Credit Suisse Group was downgraded to BBB- from BBB by S&P. Its senior unsecured debt, as well as the subordinated and hybrid capital instruments issued by group entities, were cut by a notch too. S&P sees “material execution risks” in Credit Suisse’s restructuring plans to make itself a simpler, less risky bank. Credit Suisse decided to carve out its capital markets and advisory unit under a new brand called CS First Boston whose future positioning is “unclear” as per S&P. The rating agency notes that the Swiss lender’s banking franchise has weakened with its fourth straight quarterly loss, that included outflow of AUM, higher withdrawals of cash deposits and nonrenewal of maturing time deposits. S&P expects Credit Suisse to underperform its peers in terms of financial results in the near future. They however note that the bank’s $4bn capital raising effort partly mitigates their assessment of downside risks.
Credit Suisse’s dollar bonds were trading stable with its USD 9.75% Perp at 95.08, yielding 11.13%