Credit Suisse buyback sees investors hold on to half of debt

(Bloomberg) --A $3 billion debt buyback offer by Credit Suisse Group AG has so far been taken up by holders of about half that amount as many opt to keep their discounted bonds issued by the embattled Swiss lender.

The bank bought parts of seven separate bonds denominated in euros and sterling, amounting to the equivalent of about €286 million ($279.6 million), it said in the release of the tender offer's indicative results on Friday. In a separate statement, it said just over $1.2 billion of dollar notes had so far been accepted for purchase with six days still remaining for investors to sell back their holdings.

The concurrent buybacks are part of a 3 billion Swiss franc ($2.98 billion) operation launched by the lender in October, which analysts saw as a show of confidence as it scooped up its own debt at a discount. Credit Suisse said at the time it wanted to "take advantage of market conditions to repurchase debt at attractive prices." 

Credit Suisse Offers $3 Billion Debt Buyback to Calm Nerves

While the repurchased bonds have broadly stayed stable or gained in value on the secondary market since the offer was announced, they're still trading at discounted prices. Some are even indicated below 80 cents, a level typically associated with firms in distress.

The 166-year-old bank has been vulnerable to rumors of takeover binds and concerns about its stability. It plans to raise 4 billion Swiss francs through a rights offering and selling shares as part of an overhaul that includes downsizing its loss-making investment bank arm.

Earlier this week, S&P Global Ratings cut its score of Credit Suisse Group to BBB-, the lowest investment-grade step, citing "material execution risks."

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