BofA analyst expects Credit Suisse to accelerate capital plans announcement (NYSE:CS)
Sharp drops in Credit Suisse (NYSE:CS) bonds as well as its stock are likely to accelerate the company’s planned announcement of sales to generate capital, Luis Garrido, a high-grade credit analyst for BofA Securities, said in a note to clients on Monday.
“We believe that capital-generative measures, if announced promptly, could help restore confidence in the bank,” the analyst said. He reiterates BofA’s Overweight rating on Credit Suissse’s (CS) senior holdco bonds as he expects announcements to come shortly.
The company had already announced its plan to seek third-party capital for its securitized products business, which has $20B risk-weighted assets and $75B leverage exposure, Garrido point out. In July, the bank said its aims to create a capital-light, advisory-led investment banking business with a more-focused markets business that will complement its wealth management and Swiss Bank franchises.
Last week, the bank had reiterated that it will provide investors with an update of its strategic review when it reports Q3 2022 earnings on Oct. 27.
Earlier on Monday, Credit Suisse (CS) ADSs slid to all-time low, dropping to an all-time low of $3.70 in the U.S. before perking up 1.2% to ~$3.97 at 12:53 PM ET. The Financial Times had reported that the bank’s senior executives had called investors, counterparties, and large clients to reassure them of the company’s liquidity and capital positions.