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Credit Suisse Unloaded Evergrande’s Exposure on ‘Circular Financing’ Concerns-FT

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Zurich, Switzerland - 7 June, 2015: Credit Suisse logotype on the top of the Credit Suisse building on the Paradeplatz square

Credit Suisse disposed of its entire exposure to the troubled Chinese property developer late last year, according to a report by FT on Friday.

The decision will protect the Swiss bank from massive losses if the world’s most indebted developer falls into default. But its past actions raise new reputational concerns with the lender recovering from the Archegos and Greensill scandals.

In the last ten years, Credit Suisse helped to organize $4.6 billion of dollar bonds for Evergrande, nearly 13% of the total and second only to China Securities Co.

Meanwhile, the top international underwriter has not underwritten any debt for two years after becoming worried about the developer’s financials.

Nearly $4.2 billion of bonds arranged by Credit Suisse are still outstanding. The underwriter sold the bonds to counterparties amid fears Evergrande may start missing international debt payments.

A Thursday statement by Credit Suisse informed investors and asset management clients that the bank’s funds held very little Evergrande debt. Credit Suisse had concerns about Evergrande for nearly three years. CSGN up +0.64%, Evergrande Group down -10.96%

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