Apollo Weighs Buying Stake In Credit Suisse's Investment Banking Unit

  • Apollo Global Management APO is reportedly looking to buy a stake in Credit Suisse Group Inc's CS revamped investment bank.
  • Credit Suisse said last year that it would split off its investment bank into an independent capital market & advisory bank called CS First Boston
  • The troubled bank said it would raise outside capital to launch the new entity, which it hopes to list in a separate initial public offering eventually.
  • The talks with Apollo are continuing and could still fall apart, Wall Street Journal reported
  • An investment in CS First Boston would represent another level of commitment from Apollo, which had previously agreed to take over Credit Suisse's securitized-products group, which packages and resells debt. The size of the potential stake is unknown.
  • Credit Suisse said it had secured $500 million from an unnamed investor last year. Chairman Axel Lehmann said in December that a few offers were ongoing to help finance CS First Boston's leveraged-finance business.
  • The revived CS First Boston will focus on parts of the investment-banking business that require less capital, such as advising companies on mergers and acquisitions. 
  • Credit Suisse has said it would keep some markets-trading businesses to assist its wealthy clients, divest the securitized products division to Apollo and move other businesses to a non-core unit. 
  • Bond manager Pacific Investment Management Co is also considering taking a stake in the securitized-products business, WSJ reported citing people familiar with the matter.
  • Price Action: CS shares are up 0.28% at $3.53 during the premarket session on the last check Tuesday.
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