Credit Suisse Group AG’s share price up, sells 5 billion dollars of bonds after reaching settlement with U.S. prosecutors

Credit Suisse Group AG sold 5 billion dollars of its bonds. This is the first time the bank carries out a benchmark offering since it pleaded guilty of helping U.S. citizens to avoid paying their taxes.

Earlier this week, the bank officially confessed that it helped wealthy U.S. citizens cheat on their taxes. The company also reached an agreement with the prosecutors to pay 2.6 billion dollars in penalties.

The global head of debt capital unit of Credit Suisse – Mr. Tommy Mercein said in a statement, which was cited by the Wall Street Journal: “It was just a straight, successful, well-oversubscribed deal which came with a great investor reception.” As reported by Bloomberg, Mr. Mercein also added: “Investor demand was very strong, both in terms of size of the order book and number of investors involved.”

The bonds sale was put under scrutiny. Three- and five-year bonds were issued by Credit Suisse Group AG, that yielded 60 and 80 basis points more than similar-maturity Treasuries. The banks bond sale included three tranches. People with knowledge of the matter reported that 10 billion dollars worth of orders were attracted by the transaction.

Despite having difficulties, the company managed to reach a settlement with U.S. prosecutors, but its confession raised concerns about Credit Suisse Groups ability to keep operating on the territory of the U.S. Still, the officials of both parts have done their best in order to narrow the eventual consequences by the banks faulty behaviour.

As reported by Bloomberg, one of the analysts working at CreditSights Inc. – Mr. Simon Adamson said in a note published on May 20th that “while the fines are manageable, the financial impact should not be understated”.

Credit Suisse Group AG was gaining 0.46% to trade at 26.36 Swiss francs per share by 10:49 GMT, marking a one year change of -6.19%. According to the information published on the Financial Times, the 31 analysts offering 12-month price targets for Credit Suisse Group AG have a median target of 30.30, with a high estimate of 36.10 and a low estimate of 16.00. The median estimate represents a 16.23% increase from the last price of 26.07.