The Swiss bank's liquidation of more than $10 billion in troubled supply chain funds is advancing – with some losses already emerging.
Eight weeks after pulling the plug on a Greensill-managed line of funds, Zurich-based Credit Suisse is pinpointing the pain. The Swiss bank said it is working with experts to ascertain the value of three specific investments in the funds, which clients plowed $10.1 billion into.
Specifically, Sanjeev Gupta'sGFG Alliance, coal miner Bluestone, and construction start-up Katerra «appear to be principal sources of valuation uncertainty,» Credit Suisse said on Monday in an update on Greensill on its website. The three make for more than $2.3 billion in outstanding financing, the Swiss bank said – that translates to 45 percent of the face value of the notes outstanding.
Fund Value Discounted
Credit Suisse said the other funds assets are worth $2.82 billion, which is seven percent less than their prior book value, following discussions with Luxembourg's fund regulator and an outside adviser. This represents an $190 million reduction in their value.
Together with Archegos, Greensill is roiling Credit Suisse, which has thus far paid back $4.8 billion to investors but warned they may face losses. Clients in the funds are gearing up for a showdown with the Swiss bank over the investments, amid Swiss regulatory scrutiny.
