credit suisse group ags longterm rating was downgraded by sp global ratings to just one level above junk status underscoring the banks challenges after it laid out a radical restructuring plan last weekthe swiss banks longterm rating was cut to bbb from bbb with a stable outlook thats just one notch above the bb speculative grade the us ratings firm echoing several analyst after the restructuring was announced on thursday said it sees material execution risks amid a deteriorating and volatile economic and market environment it also signaled that some details around asset sales remain unclear credit suisses new strategy triggered the biggest singleday decline on record on the day with shares tumbling 18 as investors weighed the high costs of the plan the modest return predictions and the significant dilution the strategic review came as the bank posted a quarterly loss of 403 billion swiss francs including a large impairment of deferred tax assets related to the revamp the restructuring will see the investment bank broken up and will cost about 29 billion francs 29 billion through 2024 credit suisses thirdquarter earnings pointed to a weakened franchise as its leading wealth management business proved less resilient than previously anticipated demonstrated by client money outflows and an inflexible cost base sp said in a statementearlier this year sp had affirmed credit suisses longterm rating at bbb citing the groups commitment to strong capital although the outlook remained negative amid uncertainties about the revised strategy the new downgrade means credit suisse has the worst credit rating from sp among all major investment banks creating a structural disadvantage as lower ratings usually translate into higher funding costs they also tend to make lenders less attractive as counterparties for derivatives transactionsseveral downgrades played an important role in deutsche bank ags loss of market share several years ago and the firms rebounding credit ratings since then have similarly been a decisive factor in winning back that market share meanwhile moodys affirmed credit suisses senior unsecured debt rating at baa2 and downgraded the longterm senior unsecured debt of a major subsidiary of the swiss bankwith these ratings a downgrade to noninvestment grade does not seem imminent said zurcher kantonalbank analyst christian schmidiger to shore up its finances the bank is planning to raise 4 billion francs through a rights issue and selling shares to key investors including the saudi national bank chairman axel lehmann has said the capital increase will make the lender rock solid helping it to carry out the overhaul which will see the bank spin out an investment banking boutique while shrinking the trading operations other key elements of the restructuring include selling parts of its securitized products group to apollo global management inc and pacific investment management co the bank also wants to cut its workforce by 9000 to 43000 by 2025bank executives had wanted to avoid a capital increase given the shares were trading near record lows but saw outflows of assets and deposits from wealthy clients and ultimately decided