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Bond Market News
Credit Suisse In Talks for Possible $4-8bn Capital Raise; Dollar Perps Up over 3.5%
October 19, 2022
Credit Suisse is said to be in talks with RBC and Morgan Stanley on a potential capital raise, in an effort to raise funds for its restructuring, according to sources. This comes alongside its efforts to sell some of its businesses like US asset management and investment banking arms. The capital raise is being explored under what is called “Project Ghana” and sources note that the news could be out on October 27 when the bank would make a formal announcement alongside its earnings. Analysts estimate that the Swiss bank may raise $4-8bn, where at least $2bn would be to cover restructuring and any operating losses over the next couple of years. Analysts at investment banking company KBW say that Credit Suisse has a ” capital ‘hole’ of 6 billion francs” that needs to be filled for restructuring, regulatory purposes and to support growth where asset sales alone are unlikely to be sufficient to fill this gap. The troubled bank was said to have approached Middle Eastern sovereign funds too for capital purposes.
CS’s dollar perps were up over 3.5% – its 5.25% Perp was up 2.5 points to 71.89, yielding 10.39% to call.
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