Credit Suisse raises tier 1 capital; Underworld sells stock; North American Tungsten, Medworxx end deals

By Kenneth Lim

Boston, Oct. 16 - Credit Suisse Group became the latest major bank to raise capital with a CHF4.9 billion placement of shares and convertible notes to a small group of investors.

Underworld Resources Inc. announced a C$2.53 million stock placement to raise funds for its exploration projects.

Meanwhile, a couple of deals were canceled. North American Tungsten Corp. Ltd. called off its C$19.4 million offering of units, while Medworxx Solutions Inc. is no longer going through with a C$4.2 million unit placement.

Credit Suisse raises CHF4.9 billion

Credit Suisse said it is selling CHF4.9 billion of shares and convertible bonds through a private placement.

The company is offering 93 million treasury shares for CHF3.2 billion. It is also issuing CHF1.7 million mandatory convertible bonds.

Credit Suisse ADRs (NYSE: CS) closed at $42.50 on Thursday, up by 13.06% or $4.91.

The bonds will convert into about 50 million shares within a year.

Credit Suisse is a Zurich, Switzerland-based global financial services company.

The securities were placed with a small group of investors, the largest of which was Qatar Holding LLC.

With the capital increase, Credit Suisse will already exceed the Swiss Federal Banking Commission's 2013 capital targets and minimum leverage requirements, the bank said in a statement. The bank will also avert having to seek bailout money from Swiss regulators, a move that rival UBS took.

"Over the past few months we have had a constructive and close dialog with regulators about future capital requirements," Credit Suisse chief executive Brady W. Dougan said in a statement. "We are very pleased to have reached a solution that further strengthens our capital base and ensures our competitive position.

"Credit Suisse is very strongly capitalized and these measures mean that we immediately exceed the revised regulatory requirement for 2013. This positions us ideally to take advantage of opportunities for further growth in our targeted businesses. I am delighted that our close relationships with a number of strategic investors, who have confidence in our clear strategy and solid business model, have enabled us to raise the necessary capital."

"We very much welcome the measures announced by the Swiss authorities today, which apply to the Swiss banking system, including Credit Suisse," he added. "These are important for Switzerland's financial institutions. With regard to the longer-term financing structure and the associated capital investment, given the relatively low level of affected assets in its portfolio and its good access to capital markets, Credit Suisse has decided not to participate at this time."

The bank also guided for an overall third-quarter net loss of about CHF1.3 billion.

"The financial services sector witnessed unprecedented market disruption in September and extraordinary changes to the competitive landscape," Dougan said in the statement. "These events led to a very difficult operating environment, particularly in investment banking. Our investment bank was impacted by the volatile conditions and the result reflects further writedowns in our leveraged finance and structured products businesses and other losses resulting from the exceptionally adverse trading conditions in September."

Underworld raises for exploration

Underworld Resources said it plans to sell C$2.53 million of its common stock through a flow-through placement.

The company will sell 4.6 million flow-through common shares at C$0.55 apiece. Underworld common stock (TSX: UW) slipped 5.45% or C$0.03 to close at $0.52 on Wednesday.

There is an over-allotment option for an additional C$550,000, or 1 million shares.

Proceeds will be used for exploration.

Underworld is a junior exploration company based in Vancouver, B.C.

Medworxx, North American Tungsten pull deals

Medworxx said it is canceling plans for a C$4.2 million private placement of units because it is no longer planning to acquire HealthCast Inc.

The deal priced July 2, replacing a C$2.5 million units' sale the company priced on May 8.

Medworxx, a Mississauga, Ont., capital pool company, said it is now pursuing a strategic alliance with HealthCast instead.

North American Tungsten also called off a C$19.4 million private placement of units that priced on March 5.

The deal, which was part of a planned strategic alliance with Hunan Nonferrous Metals Corp., was ended because the approval for the alliance from regulators in China took too long, North American Tungsten said in a press release.

Based in Vancouver, B.C., North American Tungsten is a mining company focused on tungsten and related mineral properties.

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