Credit Suisse’s (CS) bonds took another beating on Tuesday following a 10-15% fall in its AT1 perps on Monday. Tuesday’s down move spread to its senior bonds as well, led by its 4.282% 2028s down 4.8 points to 77.63 currently, yielding 10.29%. This came after the Swiss lender said in its annual report that it had found “material weaknesses” in its internal controls over financial reporting. CS had to push the release of its annual report from last week after the US SEC began a dialogue in relation to cash flow statements from 2019. The FT reported that the query was in relation to the netting treatment of some securities lending and borrowing activities that led to cash flow and balance sheet positions being understated. CS however clarified that the full year 2022 results were unaffected.
This serves as yet another blow for CS, which has been under pressure for the past few months. Most recently, Harris Associates announced its stake sale earlier this month, following the Swiss regulator’s probe on outflow claims in late-February and CS’ massive annual loss of $7.9bn reported in early February. The flow of negative news has pushed its bonds lower across the board and its CDS spreads higher. Its 5Y EUR CDS spreads currently stand at an all-time high of 550bp.
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