SoftBank pulls investment from Credit Suisse funds - source

Credit: REUTERS/ISSEI KATO

SoftBank has pulled an investment from Credit Suisse's supply chain finance funds after the Swiss bank reviewed the funds and the Japanese conglomerate's role, according to a source with direct knowledge of the matter and supported by an investor letter sent by the bank.

By Brenna Hughes Neghaiwi

ZURICH, July 20 (Reuters) - SoftBank 9984.T has pulled an investment from Credit Suisse's CSGN.S supply chain finance funds after the Swiss bank reviewed the funds and the Japanese conglomerate's role, according to a source with direct knowledge of the matter and supported by an investor letter sent by the bank.

The Swiss bank launched the review after the Financial Times reported last month that SoftBank had put $500 million into some Credit Suisse funds, which in turn invested in assets selected by SoftBank-backed lender Greensill Capital.

Some of the funds' investments were in notes backed by loans Greensill made to other companies backed by SoftBank's Vision Fund.

In a memo to the funds' investors on Monday, the Swiss bank said it would change investment guidelines for its supply chain finance funds and said it had terminated an agreement with an investor in April for three of its four supply chain funds to exclusively source all of their notes through Greensill.

"This separate agreement has recently been terminated and the investor has redeemed its investment in full," the bank said in the letter.

A source confirmed that the investor which had terminated the agreement was SoftBank, and that the Japanese group had pulled its full investment from the funds.

SoftBank did not immediately respond to a request for comment.

Credit Suisse said that while in practice all the funds' investments had previously been sourced via Greensill, they were not precluded from sourcing them elsewhere.

Credit Suisse said that around 15% of the notes now held by its funds were backed by the obligations of companies in which the SoftBank Vision Fund has minority equity stakes. It said it was changing its guidelines to reduce the maximum amount of exposure its funds would have to any one company, including those backed by the Vision Fund.

(Reporting by Brenna Hughes Neghaiwi; writing by Rachel Armstrong and Brenna Hughes Neghaiwi; editing by Michael Shields)

((brenna.neghaiwi@thomsonreuters.com; +41 58 306 77 35;))

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