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Credit Suisse Securitizes Loans for Oligarchs’ Yachts, FT Says

Credit Suisse Group AG has securitized a portfolio of loans tied to yachts and private jets owned by oligarchs and entrepreneurs to offload risk, the Financial Times reported.
Bloomberg
By Bloomberg
7 Feb
MB92 Group Shipyard Pushes Sustainability for Superyachts A yacht in a dry dock, right, alongside a superyacht at the MB92 Group shipyard in Barcelona, Spain, on Wednesday, Nov. 17, 2021. Luxury liners aren’t going away — more than 600 large yachts are set to join the global fleet by 2025, according to industry publication Superyacht Group — but there’s a push within the industry to at least try and make the boats a little bit greener. Photographer: Angel Garcia/Bloomberg

The Swiss lender sold $80 million of notes related to $2 billion of loans to so-called ultra-high-net-worth clients that were backed by jets, yachts, property or other financial assets, the newspaper reported, citing an investor presentation for the deal, which was conducted at the end of last year.Credit Suisse had to offer an interest rate of more than 11% to draw hedge funds to the transaction, which was made by a unit of the bank that had previously been subject to sanctions-related issues, FT said. Credit Suisse declined to comment to the newspaper.

The bank experienced 12 defaults on its yacht and aircraft loans in 2017 and 2018, of which a third had been related to U.S. sanctions against Russian oligarchs, the newspaper said, citing the presentation.

Credit Suisse, which had long provided loans for private jet purchases, has rapidly expanded its lending against yachts since 2014, with outstanding loans exceeding $1 billion last year.

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