Credit Suisse Group AG’s business underwriting blank-check SPACs boomed to start the year, The Wall Street Journal Reports. That helped offset other huge problems — most notably a $5.5 billion loss from the March collapse of Archegos Capital Management.
Now the market for SPACs has come off the boil and new underwriting fees are threatening to dry up. Credit Suisse’s SPAC deals are being closely watched by investors and analysts, because revenue from them came to represent a large chunk of overall investment-banking revenue last year. That raised concerns that the fees and deal volume might not be sustainable.
The news follows reporting today by Reuters that Credit Suisse is feeling pressure to fend off predators. An overhaul plan could include a merger with UBS, the news organization reports.
Credit Suisse went from making an estimated $466 million in gross SPAC underwriting fees in the first quarter, to $16.1 million between April 1 and June 15, according to data provider Refinitiv. Read more.
