Fitch Places Credit Suisse AG on Rating Watch Negative

Tools

LONDON--(BUSINESS WIRE)-- Fitch Ratings has placed Credit Suisse AG's (Credit Suisse) Long-term Issuer Default Rating (IDR) of 'AA-' on Rating Watch Negative (RWN). The bank's Viability Rating (VR) of 'aa-' and its Short-term IDR of 'F1+' have also been placed on RWN. As a result, its subsidiaries' IDRs, the holding company Credit Suisse Group AG's (CSG) IDRs and its debt ratings have also been placed on RWN. A full list of rating actions is at the end of this announcement.

The rating action is part of Fitch's broad review of the largest banking institutions in the world announced in a separate comment 'Fitch Reviewing Global Trading and Universal Banks; Places Seven on Rating Watch Negative' published on 13 October available on www.fitchratings.com.

Fitch expects to resolve the RWN within a short time frame and that any downgrade of Credit Suisse's VR and Long-term IDR would likely be one notch and at maximum two notches. In resolving the RWN, Fitch will concentrate on Credit Suisse's ability to generate adequate profitability in a more difficult operating environment, on its internal capital generation necessary to achieve the strong capitalisation required under new Swiss regulations for the two big Swiss banks and on the capacity of its global wealth management business to contribute more stable earnings to compensate for the potentially higher volatility of investment banking earnings.

The agency notes that as a Swiss bank, Credit Suisse is not directly affected by the current euro zone crisis. Nevertheless, the group has significant operations in the euro zone and conditions in global capital markets have affected H211 earnings in its investment banking division. Credit Suisse's investment banking operations concentrate on client-driven flow business, where the bank benefits from strong franchises in a number of key segments globally. However, reduced client activity has resulted in lower earnings in Q211, and Fitch expects Q311 results to reflect the prolonged uncertainty in global capital markets.

As a Swiss-domiciled banking group, Credit Suisse is subject to Swiss regulations, which will require the group to reach regulatory capital ratios significantly above those for banks in other European countries. Under these regulations, Credit Suisse will have to reach a minimum 10% common equity Tier 1 ratio under Basel III. In addition, the bank will have to hold a 9% capital buffer. The group's current regulatory capital ratios are strong with a core Tier 1 ratio of 13.1% at end-June 2011. However, the bank's Fitch core capital (FCC) ratio was at 9.1%, significantly below the regulatory capital ratio, and Credit Suisse will have to achieve a material reduction in risk-weighted assets and increase capital through retained earnings to reach its target.

Fitch considers Credit Suisse's liquidity sound. The bank benefits from a solid customer deposit base, and short-term liquidity is managed conservatively. As of end-June 2011, Credit Suisse estimated a net stable funding ratio under Basel III regulations of 95% and a liquidity coverage ratio 'well in excess of requirements.'

The rating actions are as follows:

Credit Suisse:

Long-term IDR: 'AA-'; placed on RWN

Short-term IDR: 'F1+'; placed on RWN

Viability Rating: 'aa-'; placed on RWN

Individual Rating: affirmed at 'B'

Support Rating: affirmed at '1'

Support Rating Floor: affirmed at 'A'

Senior unsecured debt (including programme ratings): 'AA-'; placed on RWN; 'F1+' placed on RWN

Senior market-linked notes: 'AA- emr'; placed on RWN

Subordinated lower Tier 2 notes: 'A+'; placed on RWN

Tier 1 notes and preferred securities: 'A'; placed on RWN

CSG

Long-term IDR: 'AA-' placed on RWN

Short-term IDR: 'F1+'; placed on RWN

Viability Rating: 'aa-'; placed on RWN

Individual Rating: 'B'; placed on RWN

Support Rating: affirmed at '5'

Support Rating Floor: affirmed at 'No Floor'

Senior unsecured debt (including programme ratings): 'AA-'; placed on RWN; 'F1+' placed on RWN

Senior market-linked notes: 'AA- emr'; placed on RWN

Subordinated notes: 'A+'; placed on RWN

Preferred stock: 'A'; placed on RWN

Credit Suisse International:

Long-term IDR: 'AA-'; placed on RWN

Short-term IDR: 'F1+'; placed on RWN

Support Rating: affirmed at '1'

Senior unsecured debt (including programme ratings): 'AA-' placed on RWN; 'F1+' placed on RWN

Dated subordinated notes: 'A+'; placed on RWN

Perpetual subordinated notes: 'A'; placed on RWN

Credit Suisse (USA) Inc.:

Long-term IDR: 'AA-'; placed on RWN

Short-term IDR: 'F1+'; placed on RWN

Support Rating: affirmed at '1'

Senior unsecured debt (including programme ratings): 'AA-' placed on RWN

Commercial paper programme: 'F1+'; placed on RWN

Subordinated notes: 'A+'; placed on RWN

Credit Suisse NY (branch):

Long-term IDR: 'AA-'; placed on RWN

Short-term IDR: 'F1+'; placed on RWN

Senior unsecured debt (including programme ratings): 'AA-'; placed on RWN

Commercial paper programme: 'F1+'; placed on RWN

Senior market-linked notes: 'AA- emr'; placed on RWN

Claudius Limited:

Preferred securities: 'A'; placed on RWN

Credit Suisse Group (Guernsey) I Limited

Tier 2 Contingent Notes: 'BBB+'; placed on RWN

This rating action has no impact on the 'AAA' rating of the outstanding covered bonds issued by Credit Suisse.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable criteria, 'Global Financial Institutions Ratings Criteria', dated 16 August 2011, are available at www.fitchratings.com.

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=649171

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

CONTACT:

Fitch Italia S.p.A.
Primary Analyst
Christian Scarafia, +39 02 87 90 87 212
Senior Director
V.lo Santa Maria alla Porta, 1
20123 Milan
or
Secondary Analyst
Christian Kuendig, +44 20 3530 1399
Director
or
Committee Chairperson
Thomas Abruzzo, +1 212 908 0793
Managing Director
Media Relations
Brian Bertsch, +1-212-908-0549
brian.bertsch@fitchratings.com
Michelle James, +44 0203 530 1574
Michelle.James@fitchratings.com