“Credit Suisse accelerates the radical restructuring of its Investment Bank with the announcement that it has entered into definitive transaction agreements to sell a significant part of its Securitized Products Group (SPG) and other related financing businesses to Apollo Global Management (Apollo),” said Credit Suisse.
“The execution of these agreements represents an important step towards a managed exit from the Securitized Products business, which is expected to significantly de-risk the Investment Bank and release capital to invest in Credit Suisse’s core businesses.
“As part of the transaction, Apollo has agreed to acquire a significant part of Credit Suisse’s SPG portfolio assets.
“This transaction, together with the contemplated sale of other portfolio assets to third-party investors, is expected to reduce SPG assets from USD 75 billion to approximately USD 20 billion, through a series of transactions expected to be completed by mid-2023.
“Completion of these transactions is expected to achieve a release of Risk Weighted Assets (RWAs) of up to approximately USD 10 billion, depending on the scope of assets ultimately transferred.
“The approximately USD 20 billion of remaining assets, which will generate income to support the exit from the SPG business, will be managed by Apollo under an investment management relationship with an expected term of five years to be entered into at the first closing.
“Apollo is expected to hire the majority of the SPG team and will receive customary transitional services from Credit Suisse following the closing of the transaction in order to maintain a seamless experience for clients.
“Credit Suisse will also provide financing for a portion of the assets transferred to Apollo.
“Under the terms of the transactions contemplated with Apollo, Credit Suisse’s CET1 capital ratio is expected to be strengthened by the release of RWAs and the recognition, upon closing, of the premium paid by Apollo, whereby the final amount will depend on discount rates and other transaction-related factors.
“Closing of the transaction is expected in the first half of 2023, subject to regulatory approvals, customer consents and other customary closing conditions.”