3 Minutes, by Read this article (Adds analyst quotes, background) Reuters, DUBAI/LONDON, July 6 – The Qatar Investment Authority (QIA) has increased its holding in Credit Suisse to 6%, signaling its long-term support to the ailing bank. According to a regulatory filing, QIA subscribed to two convertible notes, which will be converted into shares later this year, resulting in a larger shareholding than previously expected. “It demonstrates the continued support of a long-term shareholder,” said Andreas Venditti, senior analyst at Bank Vontobel, who added that the deal involved a select group of large core shareholders, including QIA, committing to subscribe to the full amount of the two convertibles, including the balance not subscribed by other shareholders. Qatar’s $300 billion sovereign wealth fund is Credit Suisse’s largest stakeholder, but a disclosure in late June revealed that its holding had dropped below 5%, raising doubts about the fund’s commitment to the investment. After losing more than $5 billion in the rush to unwind deals by family firm Archegos and halt funds related to Greensill, Credit Suisse’s top management is under pressure to come up with an overhaul plan.] The Qatari fund was among the investors who subscribed to Credit Suisse’s capital raise in April, when the Swiss lender issued obligatory convertible notes, according to a new filing with the US Securities and Exchange Commission. According to the new filing, QIA’s ownership in the company remains at 4.84 percent, but when the convertibles are factored in, the share jumps to 6.01 percent. The required convertible notes will be converted at six months’ maturity, according to Credit Suisse, although they may be converted sooner if certain events occur. According to Javier Capape, director of sovereign wealth research at Spain’s IE Center for the Governance of Change, it follows previous strong bets on fintech start-ups, with QIA participating in venture capital rounds in Starling Bank, Paycor, and Tandem. “By investing on ‘conventional banking’ while also betting on new financial innovations, QIA is balancing risks in this difficult area.” QIA made its first investment in Credit Suisse in 2008, at the height of the financial crisis, and has since increased its holding to over 5%. Credit Suisse shares were down 0.9 percent in late morning trade, bringing the year-to-date loss to 15.5 percent. (Editing by Louise Heavens and Chizu Nomiyama; reporting by Saeed Azhar in Dubai and Tom Arnold in London.)/n
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