In order to pay for its restructuring Credit Suisse is said to be considering issuing a convertible bond or preferred shares.
With less than a week to go before Credit Suisse announces the progress and results of its strategic review, the rumor mill surrounding it is still operating at a brisk pace.
The latest product from the rumor mill is that the bank will issue either convertible bonds or preferred shares to pay for restructuring costs variously estimated to be somewhere between $4 to $9 billion, according to a «Bloomberg» (paywall) report on Friday citing people familiar with the matter. Taking such an approach would limit the need to sell shares that are trading at bargain basement prices at the moment.
Archegos Precedent
Such a move does have precedent at Credit Suisse. When Archegos Capital exploded in 2021, Credit Suisse raised around $2 billion via mandatory convertible notes.
A Credit Suisse spokesman declined to comment.
According to Bloomberg, the bank is working with the Royal Bank of Canada and Morgan Stanley on the potential increase and cited people who asked not to be identified because the talks are private. Such a move would not be done in isolation, with Credit Suisse also likely to offload some of its business, likely the investment banks, securitized products. There is also the potential sale of its asset management business in the US.
Reaching Out
Credit Suisse seems to be leaving no stone unturned for restructuring options, and recently approached the Qatar Investment Authority (QIA) for a possible capital infusion, according to reports. Major shareholders including Abu Dhabi's Mubadala Investment and Saudi Arabia's public investment fund are also said to separately be considering investments into the investment bank or other businesses at Credit Suisse, «Bloomberg» said.
