The move forms a key part of the bank’s strategic review, announced today, which is designed to reduce risk-weighted assets and leverage exposure as Credit Suisse shifts its Investment Bank towards a more stable, less capital-intensive, and advisory-focused model.

Under the terms of the proposed transaction, investment vehicles managed by affiliates of Apollo and PIMCO would acquire the majority of SPG’s assets and other related financing businesses from Credit Suisse, form a new platform to enter into an investment management agreement to manage the residual assets on Credit Suisse’s behalf, hire SPG team members to the new platform and receive certain ongoing services from Credit Suisse in order to maintain a seamless, high-touch experience for clients.

Credit Suisse’s Securitized Products Group is a full-service, vertically integrated credit solutions provider to a range of incumbent and emerging lenders across residential and commercial real estate, consumer and other asset classes.

Axel P. Lehmann, Chairman of the Board of Directors of Credit Suisse, commented, “In July, we announced our intention to bring third-party capital to our Securitized Products Group as part of our broader strategic review. We have been delighted by the broad interest in this high-quality franchise and are pleased to partner with Apollo and PIMCO on the next stage of its growth.”

Ulrich Körner, Chief Executive Officer of Credit Suisse, remarked, “At today’s Investor Day presentation, we are communicating our vision for Credit Suisse as a capital light and focused bank serving the needs of our clients. This transaction accelerates the realization of that vision and ensures continuity for valued clients of the Securitized Products Group.”

“This transaction with Credit Suisse demonstrates Apollo’s differentiation as a partner to leading financial institutions and, together with our clients, creating a home for some of the highest quality credit origination platforms and professionals,” said James Zelter, Co-President of Apollo Asset Management, adding “We are delighted to add the clients and team of the Securitized Product Group to our growing family of Asset-Backed Finance platforms and look forward to having this franchise serve new and existing clients. We are excited to continue to build on the strength of the platform and extend the range of products offered to clients.”

The transaction proposed under the framework agreement is subject to the signing of final binding documentation, which is anticipated during the fourth quarter of 2022. Closing of the proposed transaction would be subject to customary closing conditions and regulatory approvals and would be expected to occur during the first half of 2023.

Centerview Partners LLC and CS First Boston are acting as financial advisors and Sullivan & Cromwell LLP is acting as legal advisor to Credit Suisse in connection with the potential transaction.

GreensLedge Capital Markets LLC is acting as financial advisor and Sidley Austin LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are acting as legal advisors to Apollo in connection with the potential transaction.