Credit Suisse's restructuring will result in high costs and a great deal of uncertainty. This is impacting its credit ratings.
Evaluations from rating agencies help determine the conditions and prices at which companies can borrow money. Now two of them have lowered their ratings for Credit Suisse, according to a report from «AWP» (in German).
S&P lowered its rating for the liabilities of Credit Suisse AG and other important Credit Suisse entities to «A-/A-2» from «A/A-1». For the Credit Suisse Group, the rating was dropped to «BBB-» from «BBB.» The outlook remains «stable.»
Moody's agency also downgraded its rating for Credit Suisse AG, ratcheting it down to «A3» from the previous «A2». For the Group, however, the previous «Baa2» was maintained, while the outlook for both units remains «negative.»
Risks and Uncertainties
The agencies' comments highlight the considerable risks involved in implementing the announced restructurings.
Moodys points to the scale and complexity of such a realignment. Additionally, there is the current difficult economic and market environment, which could negatively impact the speed and cost of the restructuring, S&P says.
The future positioning of CS First Boston, to which parts of the investment bank are to be moved, also remains unclear.
