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Credit Suisse First Boston writes off big loss

Credit Suisse First Boston (CSFB) says it is writing off $214 million (SFr318 million) in bonds issued by National Century Financial Enterprises (NCFE).

This content was published on November 26, 2002 - 14:16

In a statement on Tuesday, the investment bank accused the bankrupt healthcare finance firm of "massive fraud".

CSFB said it currently holds around $258 million worth of bonds issued by affiliates of the finance firm, which filed for bankruptcy last week.

It said it would now be writing down those bond holdings to $44 million, or 17 per cent of the principal amount.

Massive fraud

"CSFB... suffered losses as a result of what appears to be massive fraud at NCFE," the investment bank said.

"It is increasingly apparent that NCFE and its officers deliberately misled CSFB and other investors," it added, and promised to "vigorously pursue" those responsible for the losses.

CSFB said it would continue to monitor the situation closely and would make further adjustments to the value of the bonds, if necessary.

CSFB is active in 36 countries serving institutional, corporate, government and private clients.

Bond issue

On Tuesday the Credit Suisse Group moved to strengthen its shrunken capital base by launching a SFr1 billion convertible bond.

Markets had been expecting the issue after Credit Suisse said a fortnight ago that it would be looking to shore up its balance sheet.

Earlier this month the company reported a record third-quarter loss of SFr2.1 billion, including a SFr1.4 billion deficit at its struggling Winterthur insurance arm.

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