Credit Suisse announced today that it has entered into a framework and exclusivity agreement to transfer a significant portion of its Securitized Products Group (SPG) and other related financing businesses to an investor group led by Apollo Global Management.
The move forms a key part of the bank’s strategic review, announced today, which is designed to reduce risk-weighted assets and leverage exposure as Credit Suisse shifts its Investment Bank towards a more stable, less capital-intensive, and advisory-focused model.
Under the terms of the proposed transaction, investment vehicles managed by affiliates of Apollo and PIMCO would acquire the majority of SPG’s assets and other related financing businesses from Credit Suisse, form a new platform to enter into an investment management agreement to manage the residual assets on Credit Suisse’s behalf, hire SPG team members to the new platform and receive certain ongoing services from Credit Suisse in order to maintain a seamless, high-touch experience for clients.
Credit Suisse’s Securitized Products Group is a full-service, vertically integrated credit solutions provider to a range of incumbent and emerging lenders across residential and commercial real estate, consumer and other asset classes.
Axel P. Lehmann, Chairman of the Board of Directors of Credit Suisse, commented, “In July, we announced our intention to bring third-party capital to our Securitized Products Group as part of our broader strategic review. We have been delighted by the broad interest in this high-quality franchise and are pleased to partner with Apollo and PIMCO on the next stage of its growth.”
Ulrich Körner, Chief Executive Officer of Credit Suisse, remarked, “At today’s Investor Day presentation, we are communicating our vision for Credit Suisse as a capital light and focused bank serving the needs of our clients. This transaction accelerates the realization of that vision and ensures continuity for valued clients of the Securitized Products Group.”
“This transaction with Credit Suisse demonstrates Apollo’s differentiation as a partner to leading financial institutions and, together with our clients, creating a home for some of the highest quality credit origination platforms and professionals,” said James Zelter, Co-President of Apollo Asset Management, adding “We are delighted to add the clients and team of the Securitized Product Group to our growing family of Asset-Backed Finance platforms and look forward to having this franchise serve new and existing clients. We are excited to continue to build on the strength of the platform and extend the range of products offered to clients.”
The transaction proposed under the framework agreement is subject to the signing of final binding documentation, which is anticipated during the fourth quarter of 2022. Closing of the proposed transaction would be subject to customary closing conditions and regulatory approvals and would be expected to occur during the first half of 2023.
Centerview Partners LLC and CS First Boston are acting as financial advisors and Sullivan & Cromwell LLP is acting as legal advisor to Credit Suisse in connection with the potential transaction.
GreensLedge Capital Markets LLC is acting as financial advisor and Sidley Austin LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are acting as legal advisors to Apollo in connection with the potential transaction.
Credit Suisse is one of the world’s leading financial services providers. The bank’s strategy builds on its core strengths: its position as a leading wealth manager, its specialist investment banking capabilities and asset management capabilities and its strong presence in its home market of Switzerland. Credit Suisse seeks to follow a balanced approach to wealth management, aiming to capitalize on both the large pool of wealth within mature markets as well as the significant growth in wealth in Asia Pacific and other emerging markets, while also serving key developed markets with an emphasis on Switzerland. The bank employs more than 50,000 people. The registered shares (CSGN) of Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com.
Apollo is a high-growth, global alternative asset manager. In our asset management business, we seek to provide our clients excess return at every point along the risk-reward spectrum from investment grade to private equity with a focus on three investing strategies: yield, hybrid, and equity. For more than three decades, our investing expertise across our fully integrated platform has served the financial return needs of our clients and provided businesses with innovative capital solutions for growth. Through Athene, our retirement services business, we specialize in helping clients achieve financial security by providing a suite of retirement savings products and acting as a solutions provider to institutions. Our patient, creative, and knowledgeable approach to investing aligns our clients, businesses we invest in, our employees, and the communities we impact, to expand opportunity and achieve positive outcomes. As of June 30, 2022, Apollo had approximately $515 billion of assets under management. To learn more, please visit www.apollo.com.
This document was produced by and the opinions expressed are those of Credit Suisse as of the date of writing and are subject to change. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of Credit Suisse to any person to buy or sell any security. Any reference to past performance is not necessarily a guide to the future. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable but Credit Suisse does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof.
See the story as published by Credit Suisse here on October 27, 2022.
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