Credit Suisse was downgraded to A from A+ by S&P and its nonoperating holding company, Credit Suisse Group AG was cut to BBB from BBB+. S&P notes that while Credit Suisse is working to enhance its risk management capabilities, the effectiveness remains uncertain. Widespread changes to senior management highlight governance problems with recent series of “risk events” shedding light on its risk appetite and culture. While the rating agency expects volatile  revenue from higher-risk investment banking activities to decrease as exposures decrease, the group’s strategy of creating efficiency benefits under its new streamlined organizational setup may be challenging. Besides, litigation and investigations add to its pending tail risks. However, S&P notes that its CET1 ratio of 13.8% at end-March provides sufficient buffer to absorb high costs.

Credit Suisse’s dollar bonds were flat with its 5.25% Perp at 85.52, yielding 9.08%.

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