Credit Suisse Group AG hired about 20 banks to help it raise the money it needs to finance the extensive restructuring it unveiled last week.
The Swiss bank yesterday announced the syndicate in a statement that confirmed a Bloomberg story over the weekend.
It had already picked Morgan Stanley, the Royal Bank of Canada, Deutsche Bank AG and Societe Generale SA as lead managers and joint bookrunners.
Photo: Reuters
Credit Suisse is seeking to raise 4 billion Swiss francs (US$4 billion) and the Saudi National Bank has already committed to about one-third of the offer, becoming a big shareholder in the bank.
The Zurich-based lender, which has about the same market capitalization as much smaller cross-town rival Julius Baer Group, is slashing the workforce by 17 percent and breaking up its investment banking unit.
The announcement triggered the biggest single-day decline on record, with the shares tumbling 19 percent, as investors weighed the dilutive effect of the capital increase, the high costs of the plan and the modest return predictions.
New Credit Suisse chief financial officer Dixit Joshi held a due diligence call for the capital increase — dubbed “project Ghana” — with a group of financial institutions group and equity capital markets bankers on Friday, Bloomberg reported on Sunday.
As well as inviting the lead banks, another long list of international lenders to help with the underwriting of newly issued shares.
The syndicate announced yesterday includes Goldman Sachs Group Inc, Citigroup Inc, Wells Fargo & Co, BNP Paribas SA, Credit Agricole SA, Barclays PLC, Banco Santander SA, ABN Amro Bank NV, Franco-German bank Oddo BHF, ING Groep NV, Commerzbank AG, Mediobanca, Intesa Sanpaolo SpA and Bank of America Corp.
The number of banks helping with the capital increase is high, given its relatively small size.
Participating in rights issues of banks is widely seen as a lucrative mandate for investment banks as they seek to move up in league tables.
For financial institutions, giving mandates to each other for strategic initiatives such as deals or rights issues is also a tool used to manage relationships.
Financial institutions are intertwined and work together on a daily basis from interbank lending and cash management to bond issuance and custodial services, but signing up to a capital raise risks a crash in a company’s share price.
If the underwriter does not manage to sell off the shares, they end up on its own books.
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