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Credit Suisse to issue CHF1 billion mandatory convertibles
New York, Nov. 26 - Credit Suisse Group announced plans to sell CHF1 billion of mandatory convertibles securities as part of efforts to strengthen its capital base announced on Nov. 14.
The offering may be increased by up to CHF250 million depending on market conditions.
The securities will convert into Credit Suisse common stock after three years on Dec. 23, 2005 if not converted earlier.
Credit Suisse will first offer the convertibles to existing stockholders during a subscription period from Dec. 2 to Dec. 6. They will be offered at par and stockholders will be able to buy one CHF1,000 par value convertible per 952 shares.
Securities not bought by stockholders will be offered to institutional investors.
Final terms including the size, coupon and conversion price will be set at pricing, which will take place by Dec. 11.
The convertibles will have a minimum coupon of 5.75% plus the dividend on Credit Suisse stock.
The maximum conversion price will be no more than 122% over the level of Credit Suisse's common stock at the time of pricing. It will be used to set the minimum conversion ratio.
The minimum conversion price will be the level of Credit Suisse stock at the time of pricing. It will be used to set the maximum conversion ratio.
At maturity, if the stock is below the minimum conversion price then the securities will convert at the maximum conversion ratio. If the stock is above the maximum conversion price then the securities will convert at the minimum conversion ratio. Between those two levels holders will receive CHF1,000 of stock.
From Feb. 3, 2003 until 20 days before maturity, holders will be able to convert the securities at the minimum conversion ratio.
Credit Suisse First Boston will be bookrunner for the offering, which will be issued through Credit Suisse Finance (Guernsey) Ltd.
Settlement is scheduled for Dec. 23.
The securities are not being offered in the U.S. or Japan.
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