(Bloomberg) -- Pimco, Sixth Street and an investor group including Centerbridge Partners are among a shortlist of bidders for at least part of Credit Suisse Group AG’s securitized products business as the Swiss firm moves closer to a deal.
Centerbridge is vying for the unit in its capacity as co-asset manager for Martello Re Ltd., a life and annuity reinsurance company, people with knowledge of the matter said, asking not to be identified because talks are private. It isn’t immediately clear if Pimco is pursuing a deal alone or as part of an investor group. Sixth Street is also bidding.
The discussions have become more advanced as Credit Suisse is due to announce its strategic plan in less than three weeks, one of the people said. Bloomberg reported last month that BNP Paribas SA and Apollo Global Management Inc. had expressed interest in the SPG sale. BNP’s interest has since cooled, according to people familiar with the matter.
Credit Suisse’s American depositary receipts jumped more than 12% on the news.
A deal involving the securitized products group -- a trading unit with a history of high profits but also risks that require significant capital -- is a key pillar of Credit Suisse’s plan to downsize its investment bank and would help pay for other restructuring moves. A sale could lead to the release of regulatory capital and potentially some cash proceeds.
Representatives for Pimco, Sixth Street, Centerbridge, BNP and Credit Suisse declined to comment.
The SPG business, led since 2016 by New York-based trader Jay Kim, buys and sells securities which are backed by pools of mortgages and other assets, such as car loans or credit-card debt. The division also provides finance to clients who want to buy these products and will “securitize” loans -- dice them into new securities of varying risk and return -- on their behalf and sell them on to investors for a fee.
Pimco, owned by German insurer Allianz SE, is one of the world’s biggest fund managers. Martello was launched in January with the financial support of Massachusetts Mutual Life Insurance Co., among others. Barings and Centerbridge were picked to manage the reinsurer’s investment portfolio.
Earlier this year, Sixth Street hired Michael Dryden, Credit Suisse’s global head of securitized-products finance, to build out a structured-finance effort.
(Updates with additional bidder from first paragraph.)
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