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Thursday, October 28, 2021

Qatar wealth fund raises Credit Suisse stakes in convertible bond subscription

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Qatar’s sovereign wealth fund has subscribed to two convertible bonds of Credit Suisse, raising its stake in the bank to 6%.

Qatar Investment Authority’s (QIA) stake in Credit Suisse has now been raised to 6% after it subscribed to two convertible notes of the global investment bank.

The bonds will be converted into shares later this year, according to a regulatory filing.

The filing also revealed that QIA was among investors who subscribed to Credit Suisse’s capital raising in April when it issued mandatory convertible notes.

Stock exchange data still displayed QIA’s stake as 4.84% following a move by the investment fund to trim its stake in the in Swiss global investment bank and financial services firm. This was QIA’s first reduction since 2010, according to Bloomberg data.

However, the stake rises to 6.01% if the convertibles are taken into account, according to the filing.

In April, Credit Suisse said the mandatory convertible notes will be converted upon six month maturity. The notes could be converted earlier in the case of certain events.

Credit Suisse has raised capital, halted share buybacks, cut its dividend and revamped management after losing more than $5 billion from the collapse of family office Archegos and suspending funds linked to Greensill. The collapse has made Credit Suisse the worst-performing major bank stock in Europe.

Credit Suisse has been bearing the brunt of one difficult situation after another in the past few years. The latest comes as the firm attempted to recover from the damage of a spying scandal that led to the exit of Chief Executive Officer Tidjane Thiam in 2020.

2021 saw the fall of Greensill’s supply-chain finance empire. The financial services company was a key partner for Credit Suisse’s asset management business.

Read also: Ahli Bank eyes debt sale to raise $500 million

In March, Greensill filed for insolvency after it found itself unable to repay a $140 million loan to Credit Suisse and was “hit by defaults” from the businesses group GFG Alliance, one of its main customers.

Bloomberg has reported that Qatar’s former prime minister, Sheikh Hamad bin Jassim Al Thani, stands to take a personal hit from Credit Suisse’s burdens.

“Vehicles linked to him invested about $200 million in funds the bank ran with Greensill, people familiar with the matter said earlier this year,” the Bloomberg report said.

In April, Credit Suisse reported losses of $4.7 billion due to its involvement with Archegos Capital, the US-based family office that came undone when shares fell and it couldn’t meet margin calls from several global investment banks, including the Swiss firm.


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