Switzerland reveals interest rate of $274 billion loan to bail out Credit Suisse

ZURICH, March 30 (Reuters) – Swiss authorities have revealed the interest rates Credit Suisse and UBS will have to pay for 250 billion Swiss francs ($274.1 billion) as part of a bank bailout.

Credit Suisse will pay a rate equal to the Swiss central bank’s current interest rate of 1.5% per annum plus an additional 0.5% for access to the emergency liquidity assistance (ELA) program, the central bank said on Thursday.

Earlier in March, Credit Suisse announced that it would borrow up to 50 billion francs under the scheme, which requires collateral in the form of mortgages and securities.

In addition, UBS and Credit Suisse gained access to CHF 100 billion thanks to an additional liquidity support (ELA+). The interest rate on these loans to banks is 3% of the current central bank rate.

At the same time, Credit Suisse gained access to an additional 100 billion francs in government liquidity to cushion the effects of the massive outflow of funds. For this, the creditor will have to pay a premium of 3%, which will be split equally between the Central Bank and the Swiss government.

Credit Suisse also owes the Swiss authorities a liquidity commitment premium of 0.25%.

Last Thursday, the Swiss central bank raised its key interest rate by 50 basis points to 1.50%.

($1 = CHF0.9147)

The original message in English is available at the code: (Noel Illian and John Revill)


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