As it continues its restructuring, Credit Suisse has agreed to sell a major chunk of its securitized products group to Apollo Global Management. It expects to release risk-weighted assets.
Credit Suisse said it is accelerating the radical restructuring of its investment bank by entering into «definitive transaction agreements» to sell what it says is a significant part of its securitized product group (SPG) to Apollo Capital Management, the Swiss lender said in a statement Tuesday.
The deal, along with the sale of other portfolio assets to third parties is expected to reduce the assets of the SPG from $75 billion to $20, billion according to the bank.
Releasing RWAs
Upon completing the transactions, a release of up to $10 billion of risk-weighted assets (RWA) is expected to be attained, according to the statement. Additionally, the $20 billion of remaining assets will generate income to support the exit from the SPG, to be managed by Apollo through a management relationship expected to last five years.
Upon release of the RWAs, Credit Suisse is expected to strengthen its CET1 capital ratio, according to the statement.
Headcount Moving
Apollo is expected to hire the majority of the SPG team and will get help from Credit Suisse in transitioning employees to help ensure a seamless transition. Credit Suisse will also finance a porting of the assets that are transferred to Apollo.
The deal is expected to close in the first half of 2023, subject to regulatory approvals, customer consent, and other customary closing conditions.
