Greensill Loses Confidence of Backers SoftBank, Credit Suisse

Lex Greensill’s ambitious plan to transform his arcane trade-finance business into a global lending force is rapidly falling apart, Bloomberg News reported. From Credit Suisse Group AG to SoftBank Group Corp., Greensill’s most ardent supporters have signaled doubts about the loans made by his supply-chain finance business, upending his multi-billion dollar empire. Greensill Capital, which as recently as last year was seeking a valuation of $7 billion and planning to eventually go public, is now discussing options including insolvency. Greensill Capital on Tuesday made use of so-called “safe harbor protection” that’s allowed under Australian insolvency laws, according to another person familiar with the matter. At the heart of the swift unraveling at Greensill’s firm -- specializing in a loosely regulated type of short-term corporate lending -- is a fundamental question that many investors are now asking: How creditworthy are his borrowers? For Credit Suisse, the answer isn’t straightforward. The firm has frozen a $10 billion family of funds that invest in Greensill-sourced loans, citing “uncertainty” about the valuations of some of the debt. At SoftBank, Greensill’s biggest backer, the realization has been more stark. Softbank’s Vision Fund substantially wrote down its $1.5 billion stake in Greensill at the end of 2020, and is considering dropping the valuation close to zero. Read more.

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