Trisha Shetty (Editor)

Credit Suisse First Boston

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Covid-19
Type  Corporation
Website  www.credit-suisse.com
Ceased operations  2006
Industry  Investment services
Founded  1988
Credit Suisse First Boston httpsuploadwikimediaorgwikipediacommonsthu
Fate  Merged into reorganised investment banking division of Credit Suisse
Successor  Credit Suisse's investment banking division
Products  Financial Services Investment Banking
Headquarters  New York City, New York, United States

Credit Suisse First Boston (informally CSFB) was the investment banking division of Credit Suisse Group, prior to 2006. It was active in investment banking, capital markets and financial services.

Contents

In 2006, as part of a major rebranding exercise to communicate as an integrated organization - 'Credit Suisse' to clients, employees and shareholders; the group retired the 'First Boston' name and amalgamated the CSFB operations to the newly reorganized investment banking division of Credit Suisse.

Credit Suisse/First Boston 50/50 JV (1978–1988)

In 1978, Credit Suisse and First Boston Corporation formed a London-based 50-50 investment banking joint venture called the Financière Crédit Suisse-First Boston. This joint venture later became the operating name of Credit Suisse's investment banking operations.

Transition to CSFB (1988–1997)

Credit Suisse acquired a 44% stake in First Boston in 1988. The investment bank acquired its shares held by the public and the company was taken private. In 1989, the junk bond market collapsed, leaving First Boston unable to redeem hundreds of millions it had lent for the leveraged buyout of Ohio Mattress Company, maker of Sealy mattresses, a deal that became known as "the burning bed". Credit Suisse bailed them out and acquired a controlling stake in 1990. Although such an arrangement was arguably illegal under the Glass–Steagall Act, the Federal Reserve, the U.S. bank regulator, concluded that the integrity of the financial markets was better served by avoiding the bankruptcy of a significant investment bank like First Boston even though it meant a de facto merger of a commercial bank with an investment bank.

CSFB (1997–2006)

In the mid-1990s, Credit Suisse renamed itself CS First Boston as Credit Suisse First Boston, or CSFB, worldwide. The terms Credit Suisse First Boston and CSFB are generally used to refer to the global investment bank, and not only the original London franchise.

Conflict with Credit Suisse First Boston, or CSFB, in Europe began creating problems for Credit Suisse. First Boston Corporation in New York and CSFB in London had their own management teams, with competing salesmen in each other’s territory and in the Pacific region. In 1996, Credit Suisse purchased the remaining stake of CS First Boston from its management and rebranded the European, U.S., and Asia Pacific investment banks as Credit Suisse First Boston, making one global brand. In the late 1990s, CSFB purchased the equity division of Barclays Bank, Barclays de Zoete Wedd ("BZW"). BZW was considered second-tier and CSFB reportedly bought BZW from Barclays for £1 plus assumption of debt - primarily to obtain BZW's client list.

At the same time, the newly global CSFB became a leading high tech banker, acting as lead (or co-lead) underwriter in the IPOs of Amazon.com and Cisco Systems, as well as one time high fliers such as Silicon Graphics, Intuit, Netscape and VA Linux Systems. CSFB also did significant deals for Apple Computer, Compaq and Sun Microsystems among others. In 2000, at the height of the tech boom, technology deals generated $1.4 billion in revenue for CSFB. The head of CSFB’s tech group, Frank Quattrone, reportedly made $200 million in bonuses between 1998 and 2000.

In 2006, the newly reorganized investment banking division of Credit Suisse replaces the brand and entity - CSFB. Credit Suisse retired the First Boston name to "allow Credit Suisse to communicate as an integrated organization to clients, employees and shareholders".

The Irish High Court referred to advertisements by the bank in a judgment in February 2013. Mr Justice Michael Moriarty said, that while the volume of material produced by the Revenue Commissioners in an application to investigate tax-evading offshore bank accounts may have been "somewhat excessive", it related to matters which had been discussed in all media, including "the conduct of banking institutions both in Ireland and elsewhere, as exemplified by the Credit Suisse First Boston sequence of advertisements in the Irish Times".

References

Credit Suisse First Boston Wikipedia


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