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Credit Suisse Collapse Burns Saudi, Qatar Investors- Wall Street Journal

Credit Suisse’s recent meltdown erased billions of dollars in investments by Saudi National Bank , Qatar’s sovereign fund and the Saudi-based Olayan family,

Wall Street Journal (WSJ) reported Monday.  Swiss authorities persuaded UBS Group AG  to buy rival Credit Suisse Group AG in a historic deal on sunday .

UBS will pay 3 billion Swiss francs ($3.23 billion) for 167-year-old Credit Suisse and assume up to $5.4 billion in losses in a deal backed by a massive Swiss guarantee and expected to close by the end of 2023.

  • Saudi National Bank confirmed to CNBC on Monday that it had been hit with a loss of around 80% on its investment in Credit Suisse.
  • The Riyadh-based bank bought Credit Suisse stock at 3.82 Swiss francs per share. UBS is paying Credit Suisse shareholders 0.76 francs per share
  • Despite the loss, Saudi National Bank says its broader strategy remains unchanged.

WSJ also said  Saudi Crown Prince Mohammed bin Salman directed government-backed Saudi National Bank to make the $1.5 billion investment in Credit Suisse Group AG that his financial advisers harbored doubts about, according to people familiar with the matter.

Qatar and the Olayan family together plowed another $6.2 billion into the company in 2011 through a special type of debt. In 2013, Qatar converted over $4.5 billion of that debt into bonds called Additional Tier 1 capital notes—which are poised to be wiped out as part of Credit Suisse’s deal with UBS. Unknown is whether Qatar still owned any of those bonds., WSJ further reported.

(Inputs from WSJ, CNBC & Reuters)

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