On Friday, Credit Suisse offered to buy back up to 3 billion Swiss francs ($3.03 billion) of debt securities as its shares plummeted and debt bets increased. Furthermore, the Swiss lender confirmed that it would sell its famous Savoy Hotel in Zurich’s financial district. In a statement Friday regarding the offer to repurchase debt, Credit Suisse said, “The transactions are consistent with our proactive approach to managing our overall liability composition and optimizing interest expense and allow us to take advantage of market conditions to repurchase debt at attractive prices.” It comes after Credit Suisse’s shares hit an all-time low earlier this week, and credit default swaps reached a record high amid the market’s skittishness over its future.
After a string of scandals and risk management failures, the embattled bank is embarking on a massive strategic review under a new CEO. It is scheduled to provide an update along with its quarterly earnings on October 27. The most costly of the scandals was the bank’s $5 billion exposure to hedge fund Archegos, which collapsed in March 2021. Since then, Credit Suisse has reorganized its management team, suspended share buybacks, and cut its dividend to ensure its future success. Earlier this week, the bank announced the launch of a cash tender offer for eight euro- or sterling-denominated senior debt securities worth up to 1 billion euros ($980 million) and 12 U.S. dollar-denominated securities worth up to $2 billion. The offers on the debt securities will expire on November 3 and November 10, respectively. Shares of Credit Suisse rose by more than 7% following Friday’s announcement. However, they remain down close to 50% for the year.