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Credit Suisse comes to Winterthur's aid

Credit Suisse says it will inject SFr1.7 billion ($1.1 billion) into its insurer, Winterthur, to shore up flagging capital at its subsidiary.

This content was published on June 20, 2002 - 11:02

The amount includes SFr600 million in capital to "strengthen Winterthur's solvency margin", which had fallen due to poor equity markets and growth in its business, said the bank in a statement on Thursday.

Credit Suisse said the funds were in addition to the proceeds of a SFr1.1 billion perpetual bond already placed in the euro capital market.

The proceeds from the perpetual bond offering will shore up Winterthur's so-called alternative solvency capital, which is classed as debt from a tax perspective but as equity for regulatory purposes.

The perpetual bond was launched on May 27, with a 6.875 per cent coupon priced at 99.817. Shares were down 2.19 per cent at SFr46.85 in early trade.

Credit Suisse said it continued to believe that the growth prospects for both life and non-life businesses were "attractive" in spite of difficult investment conditions.

A spokesman for the group said there were no plans to sell the insurance business. Some analysts have speculated it might at least consider selling its non-life activities.

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