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Investing.com — Credit Suisse (SIX:CSGN) stock leaped over 30% at the open in Zurich on Thursday, after the troubled lender secured a 50-billion-franc support line from the Swiss National Bank.
The move reverses Wednesday’s record drop in the stock, caused by comments by Saudi National Bank (TADAWUL:1180), its largest shareholder, that it would not inject any further capital.
In a statement overnight, the SNB and regulator FINMA had asserted that Credit Suisse met all the required standards for capital and liquidity that apply to systemically important banks.
They said that there was consequently no risk of contagion to Credit Suisse from the volatility in the U.S. banking system, where three smaller lenders collapsed in the space of a week.
In addition to the 50-billion-franc Covered Loan Facility, Credit Suisse also said it will buy back up to $2.5 billion and €500 million (€1 = $1.0622) of bonds issued by its various operating companies. These have been aggressively sold in recent days and trade at a significant discount to face value. Buying them back at the current distressed rates and then retiring the bonds will generate an immediate profit for the bank, improving the bank’s capital position.
By 04:15 ET (08:15 GMT), Credit Suisse shares in Zurich were up 33% at 2.25 francs (1 franc = $1.0811).
