Credit Suisse will accept Swiss National Bank’s $54 billion liquidity offer

Credit Suisse is taking a lifeline.

Despite the company claiming that it was in tip-top financial shape, the financial institution confirmed that it would accept a multi-billion-dollar liquidity opportunity from a central bank.

Swiss National Bank announced that it would be willing to offer Credit Suisse liquidity if necessary.

But, surely, Credit Suisse would not need this since it was flush with cash, right?

Wrong.

The bank announced that it would accept the $54 billion offer from the SNB.

Here is the announcement:

Credit Suisse announces its intention to access the SNB’s Covered Loan Facility as well as a short-term liquidity facility of up to approximately CHF 50 billion in aggregate. This additional liquidity would support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs.

Credit Suisse also announces today that it is making a cash tender offer in relation to ten US dollar denominated senior debt securities for an aggregate consideration of up to USD 2.5 billion. Concurrently, Credit Suisse is also announcing a separate cash tender offer in relation to four Euro denominated senior debt securities for an aggregate consideration of up to EUR 500 million. Both offers are subject to various conditions as set out in the respective tender offer memoranda. The offers will expire on March 22, 2023, subject to the terms and conditions set out in the offer documents. 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 current trading levels to repurchase debt at attractive prices.

CEO Ulrich Koerner said: “These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders. We thank the SNB and FINMA as we execute our strategic transformation. My team and I are resolved to move forward rapidly to deliver a simpler and more focused bank built around client needs.”