Credit Suisse in $2.5 Billion Offering of Innovative Tier 2 Capital Notes

Cleary Gottlieb represented Credit Suisse AG (“CS”) in its issuance of $2.5 billion of 6.5% Tier 2 Capital Notes due 2023. The subordinated Tier 2 Capital Notes incorporate an innovative “write-down” feature in which all principal and accrued interest is automatically written down to zero upon notice to holders that certain regulatory capital-based triggers have been breached, and represent CS’s initial issuance of “low trigger” contingent capital instruments in accordance with applicable Swiss regulations. The offering, which was conducted in accordance with Rule 144A and Regulation S, closed on August 8.

The Tier 2 Capital Notes offering is the latest in a series of recent transactions in which Cleary Gottlieb has acted for CS and its parent holding company Credit Suisse Group AG (“CSG”) in the structuring and issuance of a variety of innovative regulatory capital securities designed to strengthen the Group’s capital position in light of the current regulatory and market environment. These include CSG’s 2012 issuance of CHF 3.8 billion in 4% Subordinated Mandatory and Contingent Convertible Securities, which mandatorily converted into 233.5 million shares in March 2013, and the 2011 issuance of $2 billion of Tier 2 Buffer Capital Notes guaranteed by CSG (the first ever issuance of Contingent Convertible or “CoCo” securities that included a public offering).