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ZURICH/LONDON – Credit Suisse shares jumped by over 35 percent in premarket trading on Thursday, while the value of its bonds soared after the company secured a $54-billion lifeline from the Swiss National Bank to shore up liquidity and investor confidence.
JPMorgan analysts said the loan from the SNB would not be enough to soothe investor concerns and “status quo was no longer an option”, leaving a takeover for Credit Suisse as the most likely outcome.
Credit Suisse shares were indicated at 2.3 Swiss francs ($2.48), up 35 percent from Wednesday’s close. The stock fell by as much as 30 percent the previous day after the bank’s backer said it could not offer any more financial assistance for regulatory reasons.
The Swiss bank’s announcement overnight helped stem heavy selling in financial markets in Asian trade on Thursday and European markets were heading for a bullish start to the day.
In its statement early Thursday, Credit Suisse said it would exercise an option to borrow from the central bank up to 50 billion Swiss francs ($54 billion).
Swiss central bank throws financial lifeline to Credit Suisse after shares pummeled
That followed assurances from Swiss authorities on Wednesday that Credit Suisse met “the capital and liquidity requirements imposed on systemically important banks” and that it could access central bank liquidity if needed.
