Last week Credit Suisse announced a new CEO along with terrible second-quarter results. He starts his first day in his new job seeing his institution downgraded.

Two of the three of the largest US rating agencies have given Credit Suisse lower marks after Switzerland's second largest bank posted a 1.6 billion Swiss franc ($1.62 billion) loss attributable to shareholders in the second quarter, closing out the troubled reign of CEO Thomas Gottstein

Today is Ulrich Koerner's first official day on the job as the new CEO of Credit Suisse, and already he has to accept bad news: As the rating agency Moody's announced yesterday it is downgrading the credit rating of several debt securities of the big bank.

Affected are senior unsecured debt and deposits, which have been downgraded from Baa1 to Baa2, with a «negative» outlook. The rating for senior unsecured debt and deposits of Credit Suisse was lowered by the credit rating watchdogs from A1 to A2. Further downgrades were made to the bank's counterparty risk, likely making it more expensive for the institution to refinance itself and do business with other financial firms.

No Advance Praise

Moody's isn't giving the new strategy of bank CEO Koerner any praise in advance praise. The downgrade is justified, among other things, by the challenging realignment of CS investment banking, which the bank announced last week. 

Among a laundry list of items listed in the downgrade, Credit Suisse's ratings reflect «the challenges the group is facing in successfully executing on its previously announced repositioning of its investment bank in the more difficult macroeconomic and market environment as well as uncertainty as to the business and financial implications of the group's plans to take further steps to achieve a more stable, capital light and better-aligned investment banking business,» Moody's said. 

Standard & Poor's 

According to agency reports, Moody's rival Standard & Poor's also downgraded the outlook for the creditworthiness of Credit Suisse debt securities from «stable» to «negative». The US house justified this not least with uncertainties surrounding the new bank management and the lack of a «clear strategy».

Last week Credit Suisse announced its intention to review its strategy led by Koerner. But this was very short on details, as finews.com wrote last week, with the bank indicating investors will have to wait for third-quarter results for more specifics.

Clearly, the rating agencies didn't want to wait.