One of the largest financial groups in the world attracts attention of major collection agencies. According to official sources, debt collectors are set to acquire distressed debt assets for $1.27 billion. Credit Suisse’s chiefs will sell the distressed credit portfolio to TSSP, an affiliate of private-equity fund TPG. The portfolio includes 270 bonds, loans, and other instruments related to approximately 170 companies worldwide. The bank’s press release posted on the official website says that under the terms of the deal, Credit Suisse will pay an extra charge of about $100 million, the bulk of which will be reflected in financial results for the first quarter.
Earlier, the bank announced $99 million of distressed credit write-downs. Credit Suisse’s decision to sell the massive portfolio of distressed debt assets came up as part of bank’s strategy to reduce the amount of such assets on its balance sheet. Tidjane Thiam, Chief Executive Officer of the Swiss bank, told shareholders that he plans to cut the volume of risk-weighted assets in the bank’s trading unit after it suffered huge losses due to distressed debt assets of the companies mainly in the energy, utilities, and housing industries. Now the bank’s debtors will face calls and visits from collectors.
