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Credit Suisse Asset Management reaches agreement with Bluestone Resources

Credit Suisse Asset Management (CSAM) and Bluestone Resources (Bluestone) have reached an agreement that maps out a plan for the payment of cash to noteholders, including the Supply Chain Finance (SCF) funds, which can then be distributed to investors in those funds. The agreement is also intended to secure the future for Bluestone’s mining operations.

Under the terms of the agreement, Bluestone, which has worked tirelessly over recent months to bring its mines back into production, has committed to make recurring payments to noteholders from the free cash flow generated, beginning in June 2022, up to a maximum amount of USD 320 mn.  These payments would be shared between all noteholders, meaning that approximately 81 percent of the total would be allocated to the SCF funds – specifically to the Credit Suisse (Lux) Supply Chain Finance Fund and to the Credit Suisse Nova (Lux) High Income Fund.  The agreement is subject to fulfilment of certain conditions precedent and requisite regulatory approvals.

Bluestone CEO James C. Justice, III has also agreed that the proceeds from any sale of the Bluestone entities would be shared between the Justice family and the noteholders.

With respect to any outstanding balance following any sale of the Bluestone entities, CSAM intends to seek recovery through enforcement of its rights, including under the relevant insurance coverage. To date, all insurance claims relevant to Bluestone have already been filed.  An aggregate nominal total of USD 850 mn is outstanding, of which USD 690 mn is due to the two SCF funds.

Commenting on the agreement, Ulrich Körner, CEO of CSAM, said: “This is further evidence of our determination to prioritize the return of cash to investors in the SCF funds.  To date, we have recovered USD 7.3 bn of the total USD 10 bn net asset value at the time of the funds’ suspension, and this agreement is intended to secure further recoveries for the benefit of those investors.

"We would like to thank the Justice family and their team for the professional way in which they have approached these negotiations. We commend the skill and speed with which Bluestone has managed to improve efficiency and create the conditions which have made it possible to agree to repay, over time, a substantial proportion of the debt owed to SCF fund investors."

James C. Justice, III added: "We have negotiated a settlement which enables us to take advantage of the favorable market conditions for met coal and secure the position of the mines, and the employees and communities who depend on them, for the foreseeable future."