(MENAFN- Trend News Agency) Shares in Credit Suisse tumbled to another lifetime low below 3
Swiss francs on Tuesday as investors dumped rights to subscribe to
new shares in the loss-making lender, trend reports with reference to reuters .
The rights offering, which is part of a broader capital raise
worth 4 billion francs, is intended to help fund the bank's
turnaround plan, an attempt to recover from the biggest crisis in
its 166-year history.
By 1036 GMT, Credit Suisse shares fell 2.6% to 2.93 francs as
the rights tumbled as much as 27% to as low as 0.105 on their
second day of trading on the Swiss exchange.
The offering, which is guaranteed by a group of banks, will
raise as much as 2.24 billion Swiss francs ($2.3 billion) and
follows a 1.76 billion-franc share placement where Saudi National
Bank took a 9.9% shareholding in Credit Suisse.
Shareholders in Switzerland's second-biggest bank have the right
to purchase two new shares at 2.52 francs each for every 7 rights
they hold by December 8.
Investors fear the cash call might not be enough to stabilise
the bank, which said last week it could book a pre-tax loss of up
to 1.5 billion francs in the fourth quarter, and revealed that
wealthy clients had made hefty withdrawals.
That had led to a big drop in liquidity, breaching some
regulatory limits.
Credit Suisse's five-year default swaps, a form of insurance for
bondholders, blew out to a new record high of 403 basis points on
Tuesday, according to data from S&P Market Intelligence.
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