Credit Suisse Tapped Rich Clients to Boost Lending in Rout - Bloomberg

Credit Suisse Tapped Rich Clients to Boost Lending in Rout - Bloomberg:

Credit Suisse Group AG turned to its own ultra-high-net-worth clients to bolster its ability to lend as markets sank last month and companies started drawing down credit lines to weather the coronavirus pandemic.

Institutional clients, family offices and billionaires were offered notes that pay a 2% interest on money that’s kept with the Swiss lender for a least a year, according to a person familiar with the matter. The notes, described as structured products, were issued in the first weeks of March to shore up lending capacity as coronavirus infection rates began to rise sharply, the person said, asking not to be identified as the deals were private.

Issuing notes is one more way for Credit Suisse and other firms to underpin lending after corporate clients rapidly drew down credit lines to ensure they have cash to pay suppliers and employees through the crisis. European regulators have allowed banks to tap their capital buffers and encouraged them to be flexible when accounting for soured loans, to ensure credit keeps flowing as entire economies go into lockdown.