Credit Suisse rises on report of interest from Saudi crown prince

The Wall Street Journal reported bin Salman’s interest, citing people with knowledge of the matter. According to the report, other investors could include Atlas Merchant Capital of Bob Diamond, the former chief executive officer of Barclays Plc. The report did not specify whether the Crown Prince’s investment would come in a personal capacity or through the Kingdom’s investment vehicles.

The Saudi National Bank, which is 37% owned by the country’s sovereign wealth fund, is already an anchor investor in Credit Suisse’s ongoing $4 billion capital raise. The prospect of Saudi Arabia’s investment in the spin-off would provide a further confidence boost to the lender’s restructuring efforts, and executives have already said they have a number of interested parties in a rebranding of the Credit Suisse First Boston brand under veteran dealmaker Michael Klein. Huh.

Shares of the Zurich-based bank climbed in early trade on Monday, extending gains after 13 days of losses on Friday. Shares traded at 3.17 Swiss francs at 11:14 a.m. in Zurich and have lost nearly 62% in value this year.

Chairman Axel Lehman helped halt a record stock slide last week when he said the bank’s liquidity position had improved and a massive outflow of customer assets had been halted in the first quarter. The fall in previous weeks had pushed shares closer to the level the Swiss lender was pitching to investors in raising significant capital, a development that threatened to limit the attractiveness of the offering.

Klein’s first Boston business is being acquired, which will attempt to rescue and restore the historically strongest investment banking franchise of lenders such as Mergers and Acquisitions and Leveraged Finance. The Swiss firm’s investment bank division was named Credit Suisse First Boston for nearly two decades before it decided in 2005 to retire the name to a single moniker for all of its businesses.

A potential investment by the leader of Saudi Arabia, better known as MBS, would be another demonstration of Klein’s ties to the Middle East. His connections in the Kingdom have been an important part of the investment bank and capital raising plans. He was directly involved in helping Credit Suisse make an investment by the Saudi National Bank, allowing it to take a stake of up to 9.9% in the Zurich lender, according to people with knowledge of the discussions.

Klein’s ties to the Middle East stretch back at least to his Citigroup days, where he led negotiations on a $7.5 billion capital injection from Abu Dhabi during the financial crisis. He also oversaw the Citigroup team that helped Dow Chemical Company obtain financing from the Kuwait Investment Authority.

Credit Suisse announced on Monday that it has also completed $5 billion in new debt issuance, part of the bank’s plan to shore up its balance sheet, and will provide an updated funding plan for 2023 when it reports on February 9. will release its fourth quarter earnings.

Trading of the new shares will start from December 9. Credit Suisse needs the money from the rights offering to finance a major overhaul including job cuts and exiting its investment banking business.

The text of this story is published from a wire agency feed without any modification.