Credit Suisse borrows $54 billion from the Swiss National Bank

He Credit Suisse tonight he announced that he borrowed 50 billion Swiss francs (about 54,000 million dollars) to the Swiss central bank in order to “preemptively strengthen its liquidity”. The bank lived its life on Wednesday the blackest trading day losing a quarter of its stock market value and sending its shares to an all-time low below 2 Swiss francs, something not seen in its 167-year history, a collapse that dragged down other banking stocks in Europe.

Credit Suisse is taking decisive steps to preemptively strengthen its liquidity with the intention of exercising its option to borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank (SNB) under the Credit Suisse Facility. A covered loan, as well as a short-term liquidity service, which is fully guaranteed by high-quality assets,” the entity explained in a statement released early Thursday morning and echoed by Efe.

In addition, it announced “Credit Suisse International’s offers to repurchase certain senior debt securities of OpCo for cash of up to approximately 3 billion Swiss francs ($3.2 billion).” The Swiss National Bank (SNB) said on Wednesday it would provide liquidity to Credit Suisse if needed, but assured that the bank meets the strict liquidity and capital requirements required of all Swiss financial institutions to guarantee their stability.

Credit Suisse also announced that it had made cash offer for pickup in connection with ten US dollar-denominated senior debt securities for aggregate consideration of up to $2.5 billion. At the same time, Credit Suisse reported a separate cash tender offer in relation to four senior euro-denominated debt securities for an aggregate consideration of up to EUR 500 million. Both offers are subject to various conditions set forth in the respective public offer memoranda. Offers expire March 22, 2023.

“The transactions are in line with our proactive approach to managing our overall liability structure and optimizing interest costs and allow us to take advantage of current trading levels to buy debt at attractive prices,” the Swiss entity added.

Credit Suisse – hit hard by the lack of confidence in its management and the banking system in general after the failure of three banks in the United States in one week – asked the SNB and the Swiss Financial Market Supervisory Agency (FINMA) a day earlier to make a strong statement of support to calm the market .

Both institutions issued a joint statement saying that despite problems in the financial sector in the United States, “there are no indications of a contagion risk for Swiss entities.”

The major European stock markets experienced another episode of panic with the financial sector as the protagonist on Wednesday, the second this week, this time due to the refusal of the main shareholder Credit Suisse to invest additional capital.

Milan fell 4.61%, Madrid 4.37%; London, 3.83%; Paris, 3.58%; Frankfurt, 3.27%; and the Euro Stoxx 50 index, which groups the largest listed companies, 3.46%. These are the biggest reductions so far this year in all cases.

Wall Street, for its part, closed in mixed territory, with the Dow Jones Industrials, its main indicator, losing 0.87% in another volatile day in which the New York floor was weighed down by a drop in Swiss Credit shares.

Tokyo’s main index, the Nikkei, fell 2% in the opening session on Thursday, also affected by a fall in European markets on fears of a financial crisis following the collapse of two US banks.