Credit Suisse gets OK to amend four notes for ‘too big to fail’ laws

By Susanna Moon

Chicago, Sept. 13 – Credit Suisse AG secured the needed holder support to amend four series of category A bonds at the meeting held at 5 a.m. ET on Sept. 13 in London.

As announced Aug. 22, Credit Suisse began consent solicitations to amend a number of note series to comply with Swiss regulations for large banks deemed “too big to fail.”

The issuer is asking for bondholder approval to substantially conform the terms of the note series to those of the senior unsecured debt program of the issuer to facilitate its plans, according to four previous company announcements.

The category A bonds covered by the solicitation are as follows:

• €2.25 billion 3.875% notes due 2017;

• €2 billion 5.125% notes due 2017;

• €2.55 billion 4.75% notes due 2019; and

• £39,892,000 outstanding of £400 million fixed-to-floating callable lower tier 2 notes due 2023.

For the category A bonds, the amendments will be implemented on Sept. 19 with payment made immediately after that.

The category B bonds covered by the solicitation are as follows:

• €1.5 billion floating-rate notes due 2016;

• SEK €2.75 billion floating-rate notes due 2017;

• SEK 750 million 0.875% notes due 2017;

• €1.5 billion floating-rate notes due 2017;

• €1.5 billion 0.625% notes due 2018;

• €1 billion floating-rate notes due 2019;

• €2.25 billion 1.375% notes due 2019;

• €1.75 billion 1.375% notes due 2022;

• €400 million guaranteed floating-rate notes due 2019; and

• £144,786,000 outstanding of £250 million 7% subordinated guaranteed bonds due 2020.

Holders could submit consents until 5 a.m. ET on Sept. 12.

The consent payment will be 0.1%.

For the category B bonds, the meetings will be held at 5 a.m. ET on Sept. 14.

More background

As part of the reorganization, Credit Suisse AG has established a wholly owned subsidiary, Credit Suisse (Switzerland) Ltd., a new Swiss bank that will assume the assets, liabilities, employees and contracts of the company.

Specifically, the business of the Swiss Universal Bank division of Credit Suisse AG will be transferred to the subsidiary in the second half of 2016 under an asset transfer agreement.

After the asset transfers, the subsidiary will take over for Credit Suisse AG by carrying out the business of the Swiss Universal Bank division.

In line with the Swiss bank laws and the requirements of Swiss Financial Market Supervisory Authority, or Finma, the subsidiary will be a member of the Credit Suisse group but “will have a measure of operational and managerial independence,” the release noted.

The changes will affect the issuer’s €15 billion covered bond program, with the Swiss mortgage business of the parent, including most of its mortgage assets comprising the cover pool together with related business activities, being transferred to the subsidiary.

After the reorganization, Credit Suisse AG plans to undertake a partial, or about 20% to 30%, initial public offering of the subsidiary, which “underscores the subsidiary’s identity and value within Switzerland and within the group and is intended to generate/raise additional capital for Credit Suisse AG and/or the subsidiary.”

Covered bonds

Credit Suisse AG, Guernsey Branch also is soliciting consents for the following covered bond issues:

• €1.25 billion covered bonds due January 2017;

• €1.25 billion covered bonds due October 2018;

• €1.75 billion covered bonds due March 2019;

• €1.25 billion covered bonds due January 2021;

• €1.25 billion covered bonds due September 2021; and

• €600 million covered bonds due 2039.

The consent fee will be 0.05% for these bond issues.

The solicitation was open until 5 a.m. ET on Sept. 12.

Meetings will be held beginning at 5 a.m. ET on Sept. 14 in London.

Category A, B bonds

Credit Suisse AG, London Branch is soliciting consents to amend the following category A bonds, according to a company announcement:

• HK$510 million 4.01% notes due 2020;

• HK$60 million 3.47% notes due 2020;

• NZ$80 million 6.6% notes due 2020;

• HK$85 million 3.56% notes due 2020;

• HK$150 million 3.82% notes due 2020;

• HK$300 million 4.2% notes due 2022; and

• $10 million outstanding of $30 million 5.6% notes due 2040.

The issuer also is seeking to amend the following category B bonds:

• A$50 million 6.85% notes due 2017;

• $10 million 8.23% notes due 2022;

• NOK 1.3 billion 3.25% notes due 2026;

• €50 million 2.92% notes due 2034; and

• $20 million 1.64% notes due 2042.

The consent solicitation will run until 5 a.m. ET on Sept. 19.

The consent fee will be 0.1%.

The meetings will be held at 5 a.m. ET on Sept. 20 in London for the category A bonds and at 5 a.m. ET on Sept. 21 in London for the category B bonds.

In each case, the solicitation agent is Credit Suisse Securities (Europe) Ltd. (+44 20 7883 8763 or liability.management@credit-suisse.com), and the tabulation agent is Lucid Issuer Services Ltd. (+44 20 7704 0880, Sunjeeve Patel/Paul Kamminga, or cs@lucid-is.com).

The financial services company is based in Zurich.

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