Credit Suisse buys debt and sells hotel News84Media Business
(CS) said it would buy back up to $3 billion of its own bonds to save money on debt servicing costs while taking advantage of low prices.
Friday’s announcement comes after investors raised concerns about the struggling Swiss bank’s financial condition before it announced its restructuring plan later this month.
Stocks plunged to a record low earlier this week but have since rallied. They rallied sharply on Friday, jumping 6% in morning trading in Zurich. They are still down nearly 50% since the start of the year.
The announcement of the bond sends a message to investors that Credit Suisse is not overly concerned about conserving cash.
Analysts rushed to dig through the bank’s books after rumors on social media sparked questions about whether it had enough capital to sustain large losses or cope with a sudden shock.
The lender is preparing to cut its investment bank and bolster its wealth management arm — an expensive business that could cost 6 billion Swiss francs ($6 billion), according to recent analysis by Keefe, Bruyette & Woods. Asset sales would probably only cover 2 billion Swiss francs.
The bank has just announced that it is looking to sell the famous Savoy hotel in Zurich.
“Credit Suisse regularly reviews its real estate portfolio as part of its global real estate strategy,” the bank said in a statement. “As part of this process, the bank has decided to launch a sale process for the Hôtel Savoy. We will carefully evaluate all offers and potential investors and communicate any decision in a timely manner. »
While years of scandals and fines have plagued the bank’s business, experts say Switzerland’s second-biggest bank is not about to go bankrupt, although market turmoil could make it harder raising the funds it needs to finance its recovery ambitions.
“From our perspective, looking at the company’s financial statements at the end of [the second quarter]we see [Credit Suisse’s] the capital and liquidity position is sound,” JPMorgan Chase analyst Kian Abouhossein wrote in a note to clients.