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Credit Suisse’s Refunds To Greensill Investors Now Total $5.9B

Credit Suisee has has paid $400 million more to investors affected by the Greensill-linked fund mess, bringing the total to nearly $6 billion, Reuters reported.

Greensill Capital provided supply chain financing and filed for bankruptcy in March. Part of Greensill’s business model involved selling invoices from suppliers awaiting payment for goods as short-term assets. Credit Suisse was one of the firms handling those sales. Credit Suisse also was a shareholder in Greensill.

Within days of the bankruptcy, Credit Suisse froze four funds related to Greensill. At the time of the move, Credit Suisse Multi-Strategy Bond Fund, Credit Suisse Multi-Strategy Alternative Fund, Credit Suisse Qatar Enhanced Short Duration Fund and Credit Suisse Institutional Target Volatility Fund held about $1.2 billion.

See also: Greensill Collapse Prompts Credit Suisse To Freeze Four Funds

In its second-quarter financial results distributed July 29, Credit Suisse Group stated that it already had distributed $5.5 billion to investors and announced that the recently-made $400 million payment would follow.

Greensill’s unraveling touched off instant questioning about whether the company’s problems were unique or whether the entire supply chain finance sector harbored significant risks.

For more, see: Greensill: One-Off Unraveling Or Hint Of Supply Chain Financing Issues?

George Lee, chief operating officer at CCRManager, told PYMNTS: “Digitization [is] happening in pockets, but trade finance is highly interconnected and [an] interdependent system. Global efforts are still some distance away from being sufficiently collaborative, and this results in a disconnect between said pockets of digitalization.”

Moody’s Investor Service had warned in late 2019: “Users of financial statements may not be aware of a customer’s usage of reverse factoring (another term for supply chain financing), despite the potentially material consequences. The customer itself may not fully understand the added risk that accompanies the use of this financing technique.”

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