Credit Suisse Group AG agreed to sell a big chunk of distressed-debt

assets, helping to speed the Swiss bank's retreat from

risky trading businesses.

TSSP, a credit-investing affiliate of private-equity firm TPG, will

pay about $1.27 billion for part of Credit Suisse's distressed-credit

portfolio, according to people familiar with the matter. The deal

could be announced as early as Tuesday, they said.

Credit Suisse Chief Executive Tidjane Thiam has opted to ditch much

of the bank's distressed-debt business. It is part of a move to strip

tens of billions of dollars in risk-weighted assets from the bank's

trading unit after it suffered steep losses in a business that trades

bonds, issues debt and packages loans into customized securities.

The bank has been hurt by soured loans to companies at various stages

of restructuring in the energy, utilities and housing industries, The

Wall Street Journal has reported.

As a result of challenges it is facing, Credit Suisse is slashing

employees and costs as Mr. Thiam steers the bank toward the more

stable business of wealth management.

The portfolio being sold includes 270 bonds, loans and other

instruments related to about 170 companies globally, the people said.

As part of the deal, Credit Suisse plans to take a charge of about

$100 million, most of which will be reflected in its first-quarter

results. It had already announced $99 million of write-downs related

to the distressed portfolio.

Credit Suisse's head of U.S. credit trading, Bob Franz, and its head

of distressed research and trading, Ken Hoffman, will leave the bank

and start a new asset-management firm that will help service the

distressed assets, the people said.

Private-equity firms have been on the hunt to buy Wall Street

businesses as big banks face regulations limiting their ability to

profit from riskier operations.

TSSP was co-founded in 2009 by Alan Waxman, the former co-head of a

Goldman Sachs Group Inc. group that invested the firm's own capital in

distressed and special-situations investments.

In a sign of the complexity of the Credit Suisse transaction, TSSP

dedicated nearly four dozen people to its examination of the

portfolio.

 

(END) Dow Jones Newswires

May 03, 2016 21:55 ET (01:55 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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