Credit Suisse debt insurance costs rise, bonds ease after tax probe report

Credit Suisse debt insurance costs rise, bonds ease after tax probe report
© Reuters. FILE PHOTO: The logo of Swiss bank Credit Suisse is seen at an office building in Zurich, Switzerland September 2, 2022. REUTERS/Arnd Wiegmann

LONDON (Reuters) – The cost of insuring the debt of Credit Suisse against default rose on Wednesday, while its bonds and shares fell, after reports that the Swiss lender may be the subject of a U.S. tax investigation.

Credit default swaps, an instrument that will pay its holder in the event of an issuer defaulting, rose to 337 basis points (bps) from 323 bps, according to S&P Global (NYSE:SPGI) Market Intelligence.

The U.S. Justice Department is investigating whether Credit Suisse continued helping U.S. clients hide assets from authorities, eight years after the Swiss bank paid a $2.6-billion tax evasion settlement, Bloomberg News reported on Tuesday.

Credit Suisse’s additional tier 1 dollar-denominated bonds fell by as much as 0.7 cents to 90.259 cents, while its euro-denominated bonds dropped 0.75 cents to 73.30, according to Tradeweb data.

Shares in the company were down 3.5%.

 

 

Source: Reuters