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November 15, 2022

Credit Suisse to divest parts of Securitized Products Group to Apollo

Beleaguered Swiss wealth manager Credit Suisse has struck deals to sell a sizable portion of its Securitized Products Group (SPG ) to US-based buyout fund Apollo Global Management.

The new definitive transaction agreements, which were signed as part of the overhauling of the bank’s investment bank, also include other affiliated financing businesses of SPG.

The deals will mark the end of Credit Suisse’ Securitized Products business and the bank will use the proceeds for its core businesses.

Following the completion of the deals and the proposed sale of other parts of the SPG portfolio to third-party investors, Credit Suisse’s SPG assets are set to dip from $75bn to around $20bn.  

The bank plans to finalise the agreements through a set of deals by mid-next year.

It has not divulged the value of the deals, which awaits regulatory approvals as well as clearances from customer and other customary closing conditions.

In addition, Apollo is set to recruit most of the SPG team as part of the new deals.

Credit Suisse will also offer financing for parts of the assets moved to Apollo.

In a statement, Credit Suisse said: “Completion of these transactions is expected to achieve a release of Risk Weighted Assets (RWAs) of up to approximately $10bn, depending on the scope of assets ultimately transferred.

“The approximately $20bn of remaining assets, which will generate income to support the exit from the SPG business, will be managed by Apollo under an investment management relationship with an expected term of five years to be entered into at the first closing.”

The latest development follows a Reuters report that stated that Credit Suisse drew flakes from some of its investors and a proxy adviser over the management of its newly announced overhaul.

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