The Greensill bill promises to be steep for some Credit Suisse clients. According to the Financial Times, the bankruptcy of the fintech could cost them up to $ 3 billion (2.5 billion euros). This amount would have been assessed after a long effort to disentangle the web of contracts underlying the “Greensill” funds sold by Credit Suisse to professional investors.
Greensill practiced reverse factoring. She paid her client’s suppliers quickly, at a discount. The debtor company repaid later, which allowed him to save his cash. In the meantime, Greensill replaced its receivables with funds, managed in particular by Credit Suisse.
$ 10 billion in assets
The bank could thus offer its clients cash funds offering more attractive remuneration than traditional money market funds, and apparently safe. The receivables portfolio was in fact insured at 75% of its value against the risk of default by debtors. An asset that had allowed these funds, subscribed by more than 1,000 investors to reach $ 10 billion in assets on March 1.
But when Greensill’s main insurer withdrew its coverage, the building collapsed, and Credit Suisse had to freeze its funds. The bank has reimbursed its customers to the tune of $ 3.1 billion, and is expected to pay them an additional $ 1 billion in early April. the rest should be more complex.
Several large Greensill debtors have already declared that they were not in the capacity to repay their debt, according to the British daily which lists them. So GFG Alliance, the steel giant led by Sanjeev Gupta, has said it could not pay the $ 1.3 billion it owes the funds. Just like the American mining group Bluestone Resources, which for its part owes 850 million dollars or the start-up Katerra (400 million dollars). Adding up the smallest borrowers, no less than $ 3 billion could go unpaid.
Credit Suisse has not officially commented on this information. Sources familiar with the matter told the Financial Times that this was a maximum amount, and that they hoped that the final losses would be lower, in particular thanks to the insurance contracts and the disposal of certain assets. But their amount could still be between $ 1 billion and $ 1.5 billion.