Credit Suisse to make US$1.7b supply chain fund payment

[ZURICH] Credit Suisse Group is making a US$1.7 billion payment to investors in its frozen Greensill supply-chain finance funds, taking total repayments to about half the money owed after it decided to liquidate the holdings.

The bank had earlier distributed US$3.1 billion to investors, taking the overall amount now repaid to about US$4.8 billion, according to a statement on Tuesday. It plans to give a further update by the end of the month on future disbursements.

The bank suspended US$10 billion of funds last month that it managed with Greensill Capital after doubts emerged about the valuations of some of the assets, kicking off a chain of events that culminated in the collapse of Greensill Capital. The Swiss bank has warned it may also take a financial hit.

Credit Suisse is leaning toward letting clients take the hit of expected losses in the funds, a person familiar with the discussions said last week.

The bank said it is in dialogue with administrators and also engaging directly with potentially delinquent obligors and other creditors in order to recover money for investors.

"The current assessment is that there is potential for recovery in these cases although clearly there is a considerable degree of uncertainty as to the amounts that ultimately will be distributed to investors," the bank said.

BLOOMBERG