Credit Suisse announced on Thursday it would borrow up to 50 billion Swiss francs ($53.69 billion) from the Swiss National Bank through a covered loan facility and a short-term liquidity facility, in bid to bolster liquidity and investor confidence after a sharp drop in its shares fueled concerns about a global financial crisis.
The lender’s shares plunged dramatically Wednesday, hitting an all-time low for a second day, after its top investor Saudi National Bank said it won’t be able to provide further support.
The embattled bank Credit Suisse said that this step will “support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs.”
The bank has also announced that it will make a cash tender offer in connection with ten senior debt securities denominated in U.S. dollars for a maximum aggregate consideration of $2.5 billion, and a separate offer in connection with four senior debt securities denominated in Euros for a maximum aggregate consideration of 500 million Euros.
Swiss regulators stated after European markets closed Wednesday that Credit Suisse is in compliance with capital and liquidity standards and that the Swiss National Bank will provide emergency liquidity if needed.
Futures for the Euro Stoxx 50 rose more than 2% after the announcement, as did US futures, with the Dow Jones Industrial Average futures rising by more than 100 points. Futures for the S&P 500 and the Nasdaq 100 both increased by 0.45% and 0.54%, respectively.
The Swiss franc recovered from Wednesday’s steep drop.