Credit Suisse to repay further $750 mln to Greensill-linked fund investors (updated)

Bluestone Resources

02/07/2021 11:23

(Adds detail, background)
    By Brenna Hughes Neghaiwi
    ZURICH, July 2 (Reuters) - Credit Suisse  CSGN.S  is paying
out a further $750 million to investors in its Greensill-linked
supply chain finance funds, its asset management arm told
investors on Friday.
    It has recovered some $6.1 billion of the $10 billion in
funds backed by insolvent supply chain finance firm Greensill
Capital, it said on Friday, a slight increase over the $5.9
billion through late May.  urn:newsml:reuters.com:*:nL5N2NC2B7
    The collapse of the funds in March kicked off a tumultuous
period for the bank, culminating with a multi-billion dollar
loss related to family office Archegos in a raft of executive
oustings and an impending overhaul as top management fight to
keep the bank intact.  urn:newsml:reuters.com:*:nL2N2OC16R  urn:newsml:reuters.com:*:nL2N2O70G6  urn:newsml:reuters.com:*:nL5N2OC695
    The new repayments, planned for the week of July 5, will
bring the total it has paid out to investors in the liquidation
proceeds to $5.6 billion.
    "Further liquidation proceeds are expected to be paid out to
investors as soon as practicable in future installments," Credit
Suisse said in the note. "Concrete timing on the next cash
payouts cannot be provided at this moment."
    Credit Suisse is focusing on some $2.3 billion in loans
provided by Greensill to three single counterparties, the
biggest of them Sanjeev Gupta's GFG Alliance, which are
experiencing repayment issues.
    On Friday, it said roughly $2.3 billion in late payments had
accumulated as of June 29, approximately $1.8 billion of which
were related to so-called "focus areas" comprised of these three
groups, while a further $500 million was related to
single-counterparty exposures.
    The group is in deep discussions with mining magnate Gupta
over the $1.2 billion exposure its funds hold to his
wholly-owned GFG Alliance, representing the fund's single
biggest pool of at-risk assets.
    In late June, the two groups reached a six-week standstill
agreement on GFG'S Australian steel and coal mining assets,
which they hope will allow GFG to refinance the operations.
 urn:newsml:reuters.com:*:nL2N2O50C4
    Credit Suisse has also held discussion with Softbank-backed
construction startup Katerra over a $440 million exposure, and
with West Virginia governor Jim Justice's coal company Bluestone
Resources over a $690 million exposure.
    Katerra in June filed for insolvency, estimating liabilities
of $1 billion to $10 billion and assets of $500 million to $1
billion.  urn:newsml:reuters.com:*:nL2N2NP0DH
    On some of these exposures, Credit Suisse expects insurance
to kick in if repayments are not made, and the bank is looking
to related insurance, primarily from Japanese group Tokio Marine
 8766.T .  urn:newsml:reuters.com:*:nL2N2NY09D
    Bond and Credit Company (BCC), a Tokio Marine unit, had
provided $4.6 billion of coverage to Greensill credit notes,
indirectly covering some of the Credit Suisse funds as a
so-called "loss payee".  urn:newsml:reuters.com:*:nL1N2L80H5  urn:newsml:reuters.com:*:nL1N2LM05Z

 (Reporting by Brenna Hughes Neghaiwi, editing by John Revill)
 ((brenna.neghaiwi@thomsonreuters.com; +41 58 306 77 35;))