MOODY'S CONFIRMS RATINGS OF CREDIT SUISSE GROUP (SENIOR AT A1) AND ITS SUBSIDIARIES AND REVISES RATING OUTLOOK TO POSITIVE; RATINGS OF WINTERTHUR SWISS INSURANCE COMPANY (INSURANCE FINANCIAL STRENGTH AT Aa2) AND ITS SUBSIDIARY ARE CONFIRMED
New York, 08-11-97 -- Moody's Investors Service confirmed the ratings of Credit Suisse Group (senior at A1) and its subsidiaries, including Credit Suisse (Aa3) and Credit Suisse First Boston (Aa3), following the announcement that Credit Suisse Group and Winterthur Group intend to merge in an exchange of stock. Moody's also confirmed the ratings of Winterthur Swiss Insurance Company (insurance financial strength at Aa2) and its subsidiary Winterthur Finance Ltd (senior at Aa3). The merger is subject to customary shareholder approval.
Moody's said that the merger of Winterthur Group and Credit Suisse Group (CSG) could enhance the position of CSG as a large provider of bank and insurance products and as a global asset manager. The addition of Winterthur Swiss Insurance Company (Winterthur) as a principal operating subsidiary of CSG should further diversify the sources of earnings for the group, and the rating agency expects that the transaction will supplement consolidated group capital. The combination may in time include opportunities for both revenue enhancement and cost savings from improved operating efficiencies for Winterthur, as well as for the group's two main bank subsidiaries--Credit Suisse and Credit Suisse First Boston. The merger should also enhance Winterthur's capacity to leverage a number of its existing stategic initiatives in the context of structural changes affecting the insurance market. Moody's added that Credit Suisse may benefit from the bancassurance product base available to its individual customers; moreover, Credit Suisse First Boston may gain from the additional distribution channels available to its institutional asset management business.
At the same time, Moody's noted that the benefits of the merger will depend on the successful integration of Winterthur's business into the group --which may turn out to be a challenging process-- as well as on the development of joint business initiatives contemplated by the group in insurance and non-insurance products; these add elements of uncertainty for the short and medium term. Longer term, however, the combination may have positive connotations for the creditworthiness of CSG, as well as for Credit Suisse, Credit Suisse First Boston, and their subsidiaries -- thus underpinning a positive rating outlook, Moody's said. The rating outlook for Winterthur remains stable as the positive developments mentioned above may be mitigated by the potential for higher leverage and dividend payouts at the insurance entity.
The following ratings are confirmed:
Credit Suisse Group -- A1 senior debt; A2 subordinated debt.
Credit Suisse First Boston -- Aa3/Prime-1 bank deposits; C+ bank financial strength rating; Aa3 counterparty rating; Aa3 senior debt; A1 subordinated debt; A2 junior subordinated debt; Prime-1 of the bank for commercial paper.
Credit Suisse -- Aa3/P-1 bank deposits; Aa3 senior debt; A1 subordinated debt; B bank financial strength rating.
Credit Suisse First Boston, London Branch -- Aa3 senior debt; A1 subordinated debt; A2 junior subordinated debt; Prime-1 of the bank for short-term debt.
Credit Suisse Financial Products -- Aa3/Prime-1 bank deposits; Aa3 senior debt; A1 subordinated debt; A2 junior subordinated debt; Aa3 counterparty rating.
Credit Suisse Financial Products Finance Ltd -- A1 guaranteed subordinated debt.
Credit Suisse First Boston, Inc. -- A1 guaranteed senior debt; A2 guaranteed subordinated debt; Prime-1 of the company for guaranteed commercial paper.
Credit Suisse First Boston Finance BV (Netherlands) -- A1 guaranteed senior debt; A2 guaranteed subordinated debt.
Credit Suisse Group Finance BV -- A1 guaranteed senior debt; A2 guaranteed subordinated debt.
Financiere CSFB NV -- A2 guaranteed junior subordinated debt.
Credit Suisse First Boston Australia (Finance) Limited -- Aa3 guaranteed senior debt; Prime-1 of the company for guaranteed short-term debt.
Credit Suisse First Boston Finance (Gibraltar) Limited -- Aa3 guaranteed senior debt; A1 guaranteed subordinated debt; Prime-1 of the company for guaranteed short-term debt.
Credit Suisse First Boston Finance (Guernsey) Ltd --Aa3 guaranteed senior debt.
Credit Suisse Group Finance (Guernsey) Ltd. -- A1 guaranteed senior debt.
Credit Suisse First Boston Financial Services -- Prime-1 of the company for commercial paper.
Bank Leu A.G. -- A1/P-1 bank deposits; C bank financial strength; A2 subordinated debt.
Winterthur Swiss Insurance Company -- Aa2 insurance financial strength rating.
Winterthur Finance Ltd. -- Aa3 guaranteed senior debt.
Credit Suisse Group is a holding company headquartered in Zurich, Switzerland. It had consolidated assets of SF 523 billion (approximately US$ 344 billion) at December 31, 1996. Winterthur is a Swiss Insurance Company with headquarters in Winterthur, Switzerland. As of December 31, 1996, the group reported gross premiums of SF 25.9 billion and shareholder's equity of SF 5.2 billion.
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