Bonds issued by banks and financial institutions were under pressure on Wednesday as Credit Suisse woes rekindled worries about a banking crisis.
Credit Suisse U.S. stock CS fell about 13.9% to $2.16 per share in trading Wednesday, while its shares in Europe CSGN dipped below the 2 franc level, after the bank’s top shareholder, Saudi National Bank, told Bloomberg it wasn’t able to invest any more capital into the bank. The backdrop for the Swiss bank’s convertible debt looked more grim, with its 9.75% coupon “co-co” bonds due June 2027 pegged at an average price of about 36 cents on the dollar, according to MarketAxess. Wall Street broadly considers bonds trading below 70 cents on the dollar as distressed.
He also said that being a globally systemically important bank means that it has been following higher standards when it comes to capital funding and liquidity than was required of Silicon Valley Bank.