To The Moon

Credit Suisse's $54B lifeline

Credit Suisse (CS) will borrow as much as 50 billion francs ($54 billion) from the Swiss National Bank liquidity facility. The troubled Swiss bank also announced public tender offers by Credit Suisse International to repurchase certain OpCo senior debt securities for cash of up to ~3 billion francs. The news sent its Swiss shares over 32% higher today in morning trade, while its U.S.-listed shares gained 9% before the bell.

Backdrop: Credit Suisse shares plunged almost 25% in Switzerland yesterday after the bank's top shareholder - Saudi National Bank Chairman Ammar Al Khudairy - ruled out offering further financial assistance. And on Tuesday, Credit Suisse disclosed a "material weakness" in its reporting procedures and was developing a remediation plan to address the same. However, it said its 2022 results released last month were not impacted by the material weakness.

Market jitters: Yesterday's rout pushed Credit Suisse to request a public show of support from the Swiss National Bank and Swiss regulator FINMA. In an effort to calm markets, the Swiss central bank and FINMA said Credit Suisse meets capital requirements. The authorities also assured investors that problems of certain U.S. banks "do not pose a direct risk of contagion for the Swiss financial markets."

SA commentary: Contributor Dhierin Bechai said the bank is not blowing up, "but it's often not a scandal that directly causes a collapse, it's the reaction from clients and shareholders causing it." The stock may gain a bit in the coming days after the recent selloff, he said. "The reality, however, is that the company has built itself a bad financial reputation." (81 comments)

source: https://seekingalpha.com/news/3947975-credit-suisse-to-borrow-54b-from-swiss-national-bank?lctg=629bf686715db8e7e60d301f&mailingid=30853266&messageid=wall_street_breakfast&serial=30853266.2438882&userid=56657482&utm_campaign=wsb_16_03_2023&utm_medium=email&utm_source=seeking_alpha&utm_term=wall_street_breakfast