Credit Suisse lost Evergrande’s chances at risk

Updates of Evergrande Real Estate Group

Credit Suisse, a former international historian in the Evergrande case, sold all his experiences to those with Chinese problems at the end of last year, according to those who are aware of this.

This saves the Swiss bank of huge losses as the world’s largest credit provider unchanged. However, past experiences may bring new concerns to the borrower who are still frustrated with Greensill and Archegos ’bad deeds.

Over the past 10 years, Credit Suisse has helped generate $ 4.6bn deep dollars in Evergrande, about 13% of the total and second only to China Securities Co., according to Dealogic. However, Credit Suisse has not been in debt for two years due to concerns over developments.

Of the proposed Credit Suisse bonds, at least $ 4.2bn is still available. They were sold to counterparts such as property managers, hedge funds and very wealthy clients who borrow money, which can now be erased by fears that Evergrande may start they need to pay on its international debts.

Credit Suisse decided to sell their surplus to a savings bank, which they found in writing, because they “don’t like what they see”, people familiar with the matter said.

On Thursday, Credit Suisse informed both sellers and trustees that the bank’s finances had very little credit to Evergrande and that the entire agency was not fully visible.

Credit Suisse said “it is not a loan to Evergrande and we do not have the opportunity to lease the company”.

In the meantime, Credit Suisse has been suspicious of Evergrande for at least three years, according to bank accounts. Another notable incident for senior management was a loan to the company’s chairman, Hui Ka Yuan, at the end of 2018.

Evergrande had just released $ 1.8bn to help pay extra money to investors. Hui, China’s richest man, had to make $ 1bn of his own money to support the deal because of a shortage. The Financial Times reported at the time.

Hui then approached Credit Suisse to offer him a loan that could be used to buy security at Evergrande, and offer the loan as collateral. After the meeting was convened for review, the risk management criticized the design of the fundraiser, the people involved told FT.

He is also liable for a debt of more than $ 100bn, which he owns then he exploded about $ 305bn, about $ 20bn in foreign bonds.

“The trade was economically and morally wrong,” one resident said. “Also, Evergrande had a lot of hard money [among Chinese developers] and apparently he was beginning to shrink. ”

Eventually, Credit Suisse rejected the loan and began to damage his banking relationship with Evergrande soon after. However, Hui continued to be a customer in a state-owned bank, people said.

“Dangerous methods did work then. . .[but]was a warning about the kind of agreements being brought in ”by Asian investors and treasurers, he added.

Evergrande did not respond to an email request for comment.

While the world’s largest secretary, Credit Suisse was far from the only western bank owned by Evergrande. UBS and BNP Paribas also forged an agreement with the developer. BlackRock, HSBC and UBS are clearly visible and they and their customers have now lost the loss afterwards in addition to their replacement Evergrande bonds a few months before their prices fall.

The old mistakes of Credit Suisse and Evergrande come at a difficult time for the lender in Zurich, who is already facing Investor Fury and lawsuits in excess of billions of dollars in losses following the closure of $ 10bn of funds linked to Greensill Capital.

Under the new chair António Horta-Osório, it is reorganizing its risk management system and reviewing customer relationships after damaging $ 5.5bn sales from the failure of Archegos Capital.

Some of the most frustrating actions in the region are those in China Luckin Coffee. Credit Suisse reaffirmed its initial offer for 2019, but for shares to fall last year after fraud, which resulted in the family members not receiving a $ 518m loan.

Additional reports of Hudson Lockett in Hong Kong

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