FUNDING COSTS
Credit Suisse to redeem bonds
The bonds were issued in an effort to meet tougher capital rules
Credit Suisse is to redeem three bonds on which it paid interest of about Sf550m ($552m) a year, helping the bank to cut funding costs by nearly Sf900m over the next two years. The Swiss bank sold about Sf5.9bn in contingent convertible bonds to the Qatar Investment Authority and Saudi Arabian conglomerate Olayan Group in 2012 and 2013. The bonds, which convert into equity if the bank’s core capital ratio dips below a certain level, were issued in an effort to meet tougher capital rules. Credit Suisse paid 9% to 9.5% interest annually on the bonds. "This is a key step forward in reducing Credit Suisse’s funding costs, as we continue to reshape our balance sheet and optimise our capital structure," a spokesperson said on Tuesday. "It is another milestone in the bank’s three-year restructuring programme, which is due to be completed at the end of 2018." The second-biggest bank in Switzerland said it would redeem the bonds on October 23, the earliest possible date. Credit Suisse had fl...
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