Monday, March 27, 2023

Credit Suisse: Swiss authorities considering its nationalization – offer of 1 billion from UBS rejected

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Developments surrounding the future of Credit Suisse continue as the Swiss government is considering the possibility of full or partial nationalization of the bank, according to Bloomberg.

According to Bloomberg, the Swiss authorities are considering this solution in the event that the takeover by UBS does not go through. Earlier, Credit Suisse shareholders had reportedly turned down a $1 billion bid.

Citing people familiar with the matter, Bloomberg News wrote that Credit Suisse opposes the suggestion that because he considers the amount to be too low and that this would affect the bank’s shareholders and employees who have shares in the company which will be paid out in sequence (deferred shares) following a possible insolvency.

Credit Suisse: Stormy developments relating to the future of the bank

According to the Financial Times, Switzerland’s largest bank, UBS Group AG, has offered to buy Credit Suisse for nearly $1 billion, with the Swiss government planning to change the country’s law to allow a shareholder vote on the deal bypass the transaction.

Switzerland’s largest bank, UBS, is under pressure from authorities to complete its takeover of rival Credit Suisse by Sunday (19/3), hoping to avoid a collapse and contagion to Monday’s (20/03) market panic.

Government officials met this morning at the Ministry of Finance in Bern, where they focused on the issue of Credit Suisse, considering it a matter of central importance to the country’s entire banking system.

The bid submitted by UBS on Sunday morning called for a takeover at CHF 0.25 per Credit Suisse share, compared to CHF 1.86 at the close on Friday (March 17).

According to the Financial Times, UBS also insists there is a provision to cancel the deal in the event of a significant downside if CDS spreads widen by 100 basis points or more.


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