Credit Suisse has entered into an agreement to sell a sizeable portion of its securitized products business to US investment manager Apollo
Credit Suisse has entered into definitive transaction agreements to sell a significant part of its Securitized Products Group (SPG) and other related financing businesses to Apollo Global Management, according to a statement, making further progress on the expected deal.
Under the agreed terms, Apollo will hire the majority of the SPG team and receive «customary transitional services» as well as financing for a portion of the assets transferred from Credit Suisse.
SPG Assets
Apollo's transaction, together with the contemplated sale of other portfolio assets to third party investors, is expected to reduce the bank's SPG assets from $75 billion, as of September 30, to around $20 billion. The $20 billion in remaining assets will generate income to support the exit from the SPG business and be managed by Apollo under an investment management relationship that is expected to last five years.
The series of transactions is expected to be completed in the first half of 2023, subject to regulatory approvals and other conditions. The final value of the deal will depend on «discount rates and other transaction-related factors».
Post-Transaction Balance Sheet
According to the Swiss lender, it anticipates that the transaction will achieve a release of approximately $10 billion in risk-weighted assets, depending on the scope of assets ultimately transferred.
«Under the terms of the transactions contemplated with Apollo, Credit Suisse’s CET1 capital ratio is expected to be strengthened by the release of RWAs and the recognition, upon closing, of the premium paid by Apollo,» Credit Suisse said.
