The leaks of information did not stop shortly before Credit Suisse (CS) presented its restructuring plans on Thursday: CS fell short in the sales process for its securitization business, as the “Wall Street Journal” (WSJ) reported on Tuesday, citing knowledgeable people. .
The securitization business is part of Investment Banking (IB) where possibly the largest restructuring will occur. Because this line of business is mainly responsible for the current misery of the bank. The securitization business includes lucrative deals in securitized debt products, typically mortgages.
Two favorites to buy
Analysts at Goldman Sachs had estimated the value of CS’ “Securitized Products” division at CHF 1.5 to 1.8 billion. It is not known at what price the episode will be sold at the moment. The only thing that is clear is that CS urgently needs money to finance the upcoming major renovation.
There’s also speculation about who might buy the lucrative securitization business: With a consortium led by investment firm Pimco and a consortium led by private equity firm Centerbridge Partners, the New York-based “Securitized Products” group remains two favorites for entry, according to the report. However, it is not yet clear whether the buyers will buy the entire unit or just one share.
There may be other shops
According to the US business newspaper, Pimco (Pacific Investment Management), which specializes in bond investments and is owned by German insurance group Allianz, would work with private equity firm Apollo Global if it joined the “Securitized Products” group. In the second consortium of buyers, Centerbridge Partners joined forces with life and reinsurer Martello Re.
There should be clarity when CS presents the results of its strategy review on Thursday. The big bank, which is sick, can announce not only the sale of the securitization business, but also other transactions. This should account for high restructuring costs and business results that have been stubbornly red of lately. In the past few weeks, CS announced the sale of its shares in the Allfunds and Energy Infrastructure Partners funding platform and the Zurich luxury hotel Savoy. (SDA/sfa)
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
