Moody's eyes Credit Suisse for upgrade

Moody's Investors Service said it placed on review for upgrade all long-term ratings and assessments of Credit Suisse Group AG, Credit Suisse AG, Credit Suisse International, other than the B1(hyb) preferred stock ratings on CSG's additional tier 1 instruments.

The agency cut the AT1 instrument ratings to C(hyb) from B1(hyb) to reflect the write-down of all CHF 16 billion of instruments to zero on the order of the Swiss Financial Market Supervisory Authority (Finma). The outlook for CSG and its rated subsidiaries was changed to ratings under review from negative.

The rating action follows the announcement CSG will be acquired by UBS Group AG in an all-stock transaction valued at around $3 billion. The transaction is expected to close in the second quarter of 2023.

“In addition to benefitting from being owned by UBSG, a stronger financial group, CSG's creditors will also benefit from enhanced liquidity and downside protection.

The Swiss National Bank announced a CHF 100 billion unsecured facility for CSG and UBSG and a CHF 100 billion new public backstop facility for CSG. After the deal closes, Swiss authorities will also cover up to CHF 9 billion of potential losses on CSG non-core assets beyond the first CHF 5 billion, which will be borne by UBSG.

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