BlackRock to sell asset-backed bonds from Credit Suisse’s books

NEW YORK – Credit Suisse Group has hired BlackRock to help sell a portfolio of structured bonds for the Swiss bank, becoming the latest entity to tap the money manager in a time of crisis.

BlackRock’s Financial Markets Advisory group has been selling off securities over the past two weeks, including pieces of collateralised loan obligations, commercial mortgage bonds and niche asset-backed debt, according to people with knowledge of the matter.

Bonds backed by auto, credit card, student and aircraft loans or leases were also on the lists of securities put up for sale, which included at least US$300 million (S$397.5 million) of bonds, said the people.

Representatives for BlackRock and Credit Suisse declined to comment.

The sales come weeks after Credit Suisse

was sold to UBS Group in a state-brokered deal,

and just a few months after the Swiss bank’s structured team moved over to a new company called Atlas SP Partners, which is backed by Apollo Global Management. The merger will see large parts of Credit Suisse’s investment bank wound down in what UBS chairman Colm Kelleher called a bigger deal to manage than even those during the height of the 2008 global financial crisis.

This is BlackRock’s second sale process this month in structured bonds, with its Financial Markets Advisory group having also been tapped by the United States government to help sell US$114 billion of securities amassed from

failed lenders Signature Bank and Silicon Valley Bank.

Those include agency mortgage-backed securities, collateralised mortgage obligations and commercial mortgage-backed securities. BlackRock has been charged with selling those assets for the Federal Deposit Insurance Corp, which said the firm will seek a “gradual and orderly” process.

The move follows Credit Suisse’s announcement of a “new strategy and transformation plan” in late October, which included job cuts and “significant exposure reduction” to securitised products, such as collateralised loan obligations.

The US$8.6 trillion asset manager has a history of swooping in to sell old inventory in troubled times.

In the aftermath of the 2008 financial crisis, the US Federal Reserve and Treasury Department awarded contracts to BlackRock to manage US$130 billion of bad debt formerly on the books of Bear Stearns and American International Group. The Fed also turned to BlackRock to help oversee debt-buying programmes to help stabilise the US economy at the onset of the Covid-19 pandemic in 2020. BLOOMBERG