Credit Suisse Sells Debt Assets -- WSJ
May 04 2016 - 03:02AM
Dow Jones News
By Matt Jarzemsky
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.
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.
Write to Matt Jarzemsky at matthew.jarzemsky@wsj.com
(END) Dow Jones Newswires
May 04, 2016 02:47 ET (06:47 GMT)
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