Credit Suisse, banking behemoth, collapsed within a year!!

On 1 March 2021, the boards of four Credit Suisse Supply Chain Finance Funds (SCFFs) decided to suspend redemptions and subscriptions of the SCFFs, announcing weeks thereafter an immediate 30+% drop in NAV of the various funds. The fund boards subsequently approved the commencement of the liquidation process of the SCFFs. Of the funds aggregated assets, approx. 30% were in US Treasuries, so the losses represented approx. 50% of the value of all the supply chain securities!!

These Luxembourg/Liechtenstein funds were: - Credit Suisse Virtuoso SICAV, Credit Suisse Nova (Lux) Supply Chain Finance High Income Fund, Credit Suisse Nova (Lux) Supply Chain Finance Investment Grade Fund, Credit Suisse (Lie) Supply Chain Finance Investment Grade Fund).

Blackstar Capital placed Supply Chain bonds issued by NMC Health into Luxembourg, with inter alia Credit Suisse Supply Chain funds buying a lot of this debt also from Greensill Capital. Tokio Marine refused to extends its credit insurance to these bonds, giving 6 months notice, in September 2020. With the default of the Lex Greensill's financial empire in March 2021, Credit Suisse Supply Chain funds, based in Luxembourg, collapsed within weeks in 2021, writing off over US$ 3 bn. of holdings (approx. 50% of value of the supply chain bonds). By this time the bonds issued by NMC Health, with Blackstar Capital's help, had already collsped in value! The Luxembourg directors all resigned before the 30+% collapse in NAV was announced in March 2021.

Greensill Capital collapsed into insolvency in March 2021. in order to finance its activities, Greensill relied on loans provided by specialised supply-chain investment funds managed by Credit Suisse, underwritten by credit insurance from Tokio Marine : Greensill regularly issued notes that were often bought by the investment funds, thereby providing Greensill with cash. The repayment of the loans was secured by Greensill's claims to the repayment of the funds paid to its clients' suppliers. However, according to Bloomberg and The Wall Street Journal, the Credit Suisse investment funds are alleged to have bought notes tied to Greensill's "future accounts receivables finance" activity: these loans were only secured by future and uncertain sales, and were therefore riskier. The Swiss financial market regulator Finma also dealt with the CS Greensill funds and, at the end of February 2023, shortly before CS's collapse, noted a serious violation of supervisory law as part of an enforcement proceeding initiated in 2021. All directors in Luxembourg resigned just before the announcement of the huge write=off in March 2021.

Lex Greensill, Australian businessman, Queensland University of Technology law degree, 1994-2001. Daniel McGrath, Australian businessman, Queensland University of Technology law degree, graduating 2001...

Credit Suisse's share price dropped from chf 13.30 in March 2021 to chf 0.82 in July 2023 before it ceased trading and was bought out by rival UBS! The impact on the Swiss investment community and the economy generally was devastating...