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CREDIT SUISSE 'AAA' STRUCTURED TRANSACTIONS BANK RATING ON FITCHALERT -- FITCH FINANCIAL WIRE --

 NEW YORK, Jan. 7 /PRNewswire/ -- Credit Suisse's AAA' rating for structured transactions is placed on FitchAlert with evolving implications following the announcement of a plan by its parent company, CS Holdings, to acquire Swiss Volksbank, the fourth largest bank in Switzerland. The short-term F-1+' rating is affirmed. There is no apparent reason to change the long-term rating at this time. However, the significance of the proposed acquisition and uncertainties regarding loan quality at Volksbank warrant a review of the combined company's credit profile.
 With assets of Sfr 50 billion, Volksbank's balance sheet equals 38 percent of Credit Suisse's total assets. As of Sept. 30, Credit Suisse reported assets of Sfr 161.2 billion ($131.3 billion), equivalent to 65 percent of the consolidated assets of CS Holdings.
 Under the friendly takeover offer, Swiss Volksbank will become a wholly owned subsidiary of Credit Suisse. However, the offer will be extended by CS Holdings in the form of a share exchange that values Swiss Volksbank at Sfr 1.5 billion (about $1 billion at the current exchange rate), a 40 percent discount to book value. A conditional offer of lower value has been extended if any materially adverse events are revealed during due diligence. The merger is expected to occur in early Spring, pending the likely conversion of Volksbank, a cooperative, to a public limited company. The Swiss Federal Banking Commission, which is not required to approve bank mergers, has not specifically objected to the transaction.
 The combined organization will become Switzerland's largest bank, enabling Credit Suisse to strengthen its domestic market position in line with its primary competitors, Union Bank of Switzerland and Swiss Banking Corp. Historically, Credit Suisse has devoted substantial resources to capital markets activities through the lead bank and other CS Holdings subsidiaries including CS First Boston and Credit Suisse Financial Products. The proposed merger also demonstrates the cohesiveness of the Swiss banking community in identifying a solution to Volksbank's mounting loan quality problems.
 Fitch's review will focus on the competitive profile, earnings potential, and loan quality of the combined company relative to the size of the investment. Specifically, Fitch will assess whether the Sfr 600 million capital gain, together with any realized reserves that are now undisclosed, can cover loan provisioning costs in 1993. While Volksbank's provisioning standards are conservative, large concentrations to small companies that have been hurt by the protracted Swiss recession are likely to aggravate asset quality pressures in the future. Furthermore, the economic slump in Germany is likely to hurt many smaller Swiss companies that are dependent on German markets.
 Fitch will also examine the steps taken by Credit Suisse to rationalize Volksbank's commercial banking operations with its existing network and realize synergies. An expanded domestic franchise is viewed favorably, although benefits will not be apparent for several years.
 It is expected that risk-adjusted capital ratios of Credit Suisse, Swiss Volksbank, and CS Holdings will remain above 8 percent. Under Swiss capital rules, banks are required to meet minimum standards as stand-alone units and on a consolidated basis. Swiss capital requirements are more demanding than those under the Basel framework. In addition to direct capital charges for balance sheet assets, open foreign exchange positions and claims are generally subject to more stringent criteria.
 Structured transactions supported by Credit Suisse which are placed on FitchAlert evolving as a result of this action will be disclosed in a separate press release today.
 -0- 1/7/93
 /CONTACT: Ricardo Kleinbaum of Fitch, 212-908-0525/


CO: Credit Suisse ST: IN: FIN SU: RTG

CK -- NY047 -- 2612 01/07/93 11:19 EST
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Publication:PR Newswire
Date:Jan 7, 1993
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