ZURICH: Credit Suisse has sold bonds worth 220 million Swiss francs ($222 million) to help insure against certain operational risks such as rogue trading and cybercrime, a source familiar with the matter said on Thursday.
The bonds were marketed to asset managers, pension funds, reinsurers and hedge funds this month and priced last week, the source said, speaking on condition of anonymity and declining to give details on pricing.
The bond is designed to reduce capital charges related to the Swiss bank's operational risks.
Holders of the bond are paid a coupon but carry the risk of having their investments wiped out if Credit Suisse is hit by losses caused by operational problems such as computer system disruptions, cybercrime and regulatory compliance failures.
The bond was issued in partnership with Zurich Insurance Group.
Credit Suisse has faced criticism over nearly $1 billion of writedowns on certain market positions after Chief Executive Tidjane Thiam said he and other senior bank officials were unaware of the size of the positions taken in its Global Markets division.
The structure of the operational risk bond is similar to that of a catastrophe bond, in which investors lose some or all of their principal if a specified natural catastrophe - such as a hurricane or earthquake - occurs.
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