Credit Suisse Group AG shares climbed as much as 6.4% in early trading on Monday, extending gains after breaking a record 13-day losing streak on Friday.
Saudi Arabia’s Crown Prince Mohammed bin Salman is preparing to invest around $500 million as an anchor investor into the Credit Suisse’s soon-to-be carved out investment bank, the Wall Street Journal reported, citing people with knowledge of the matter. Other investors may include former Barclays Plc chief executive Bob Diamond’s Atlas Merchant Capital, according to the report.
The Saudi National Bank, which is 37% owned by the nation’s sovereign wealth fund, is an anchor investor in Credit Suisse’s $4 billion ongoing capital raise. It will eventually hold a 9.9% stake in the bank.
Credit Suisse shares traded at 3.1 Swiss francs ($3.3145) at 9:53 a.m. in Zurich, and have lost about 63% of their value this year.
The Zurich-based bank helped boost investor confidence last week when Chairman Axel Lehmann said that its liquidity situation had improved and the huge outflows of client assets earlier in the quarter had been stemmed. The declines of the past weeks had pushed the shares near the level that the Swiss lender is pitching to investors in its crucial capital raise, a development that threatened to limit the attractiveness of the offering.
The new shares will begin trading on Dec. 9. Credit Suisse needs funds from the rights offering to finance a major overhaul, including job cuts and the spin out of its investment banking business.
Credit Suisse announced on Monday that it had also completed the $5 billion in new debt issuance, part of the bank’s plan to shore up its balance sheet, and would provide an updated funding plan for 2023 when it releases fourth quarter earnings on Feb. 9. – BLOOMBERG