Market: S&P downgrades Credit Suisse's long-term credit rating
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ZURICH (Reuters) – S&P Global Ratings downgraded its long-term credit rating of Credit Suisse Group to “BBB-” from “BBB”, citing “significant execution risks” after the company’s restructuring plan was announced. bank.

Other rating agencies have also expressed doubts about the restructuring plan, presented a week ago, which will lead Credit Suisse to cut thousands of jobs and redirect to wealth management.

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In its Nov. 1 note, S&P said the bank’s restructuring steps could make Credit Suisse more stable and less risky.

“However, we see significant execution risks in a deteriorating economic and market environment that may negatively impact asset sales,” the agency said.

According to S&P, the weak operational performance in the third quarter shows that Credit Suisse’s banking franchise has weakened and the positioning of investment bank CS First Boston is unclear.

The main operating entity Credit Suisse AG and other main subsidiaries have their ratings changed to “A/A-1” from “A/A-2”. The outlook for credit ratings remains at “stable”.

Moody’s on Tuesday downgraded its rating on Credit Suisse AG’s long-term senior unsecured debt to “A3” from “A2” but maintained its credit rating for the entire banking group at “Baa2”.

Moody’s stressed that the outlook remains unfavorable due to the Swiss bank’s weakened liquidity position, negative pressures related to the delay in returning to profitability and risks related to the restructuring plan.

Like Moody’s, the rating agency DBRS Morningstar lowered the long-term credit rating of Credit Suisse AG to “A” and the long-term credit rating for the entire group to “BBB”.

Downgraded credit ratings generally lead to higher borrowing costs.

(Reporting Noele Illien and Michael Shields, additional reporting Marc Jones, Lina Golovnya, editing by Kate Entringer)

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