Credit Suisse Is Offering Blocks of Archegos-Linked Stocks

(Bloomberg) -- Credit Suisse Group AG is selling large blocks of shares tied to the Archegos Capital Management blowup, according to terms reviewed by Bloomberg.

The stock offerings -- which included Discovery Inc. and Iqiyi Inc. -- are worth about $2.1 billion, based on Tuesday’s closing prices. A torrent of similar transactions has already erased about $194 billion in market value as banks from New York to Zurich and Tokyo unwound leveraged equity bets by Bill Hwang’s fund.

His private investment firm became the center of one of the biggest margin calls of all time late last month, and represented one of the most spectacular failures of risk-management and oversight in recent memory. The downfall of Archegos will result in $10 billion of losses to banks, according to analysts at JPMorgan Chase & Co. The debacle could attract regulatory scrutiny and potential fines for the banks involved, the analysts said this week.

Read more: Archegos Ripples Through Banks’ Lucrative Hedge Fund Business

Discovery, Iqiyi and Credit Suisse all dropped in U.S. postmarket trading.

Tuesday’s block trades included 19 million Class A shares of Discovery offered at $38.40 to $39.60, a maximum discount of 1.9% to Tuesday’s closing price. In addition, 22 million Class C shares of Discovery were offered at $32.35 to $33.75, a maximum discount of 3.0%. A stake of 35 million Iqiyi shares was offered at $15.85 to $16.35, a maximum discount of 4.9%.

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