The majority of Credit Suisse's securitization business will be sold to a consortium led by Apollo Global Management in a deal now being finalized.
It has been known for some time Credit Suisse wanted to divest its securitized products business housed in the securitized products group, (SPG) to reduce the risk-weighted assets and leverage of the crisis-ridden bank. At today's presentation of the group's restructuring, the bank said it has a framework and exclusivity agreement to transfer the majority of SPG and other related financing businesses to a consortium led by Apollo Global Management.
Private Equity
Under the proposed transaction, investment companies managed by affiliates of US private equity firm Apollo and bond manager Pimco will acquire the majority of SPG assets and other related financing businesses from Credit Suisse.
A new platform will then be established through an investment management agreement to manage the remaining assets on behalf of Credit Suisse. Before the transaction, there was speculation an outright sale of SPG would raise approximately $2.8 billion in the market.
Closing in 2023
According to bank CEO Ulrich Koerner, the transaction accelerates the big bank's focus on becoming a well-capitalized banking institution. James Zelter, co-president of Apollo Asset Management, plans to incorporate the acquired business into the bank's asset-backed finance platforms and expand its product range.
The transaction is expected to close in the first half of 2023, pending regulatory approvals.
