Credit Suisse Group AG is paying up to raise billions of dollars in the U.S. and U.K. as the troubled lender relies on attractive terms to keep funding plans in place.

The embattled Swiss lender's New York branch sold $3.75 billion of two-year and five-year notes on Wednesday to yield 370 basis points over Treasuries, according to a person with knowledge of the matter. That's much higher than average risk premiums across investment grade credit.

Its London branch will price a £500 million ($598 million) bond due in just over three years on Thursday, according to another person familiar. The lender trimmed the spread offered on the notes to 425 basis points from an initially marketed 435 basis-point target over the U.K. Treasury benchmark, though is still similarly paying up for that funding.

Credit Suisse is in the throes of a huge restructuring that will see it cut thousands of jobs and reshape its investment bank to put an end to a string of huge losses and scandals. The burden of higher interest rates on its debt is another hurdle for a bank that's set to report its fifth-straight quarterly loss. The Swiss firm's net interest income fell by 14% in the first nine months of 2022, a time when many banks were net beneficiaries of a rising rate environment.

Skepticism about the restructuring is helping drive up borrowing costs. The firm also had to pay over 9% in November when it sold $2 billion of high-grade bonds. Those bonds are now trading at 104.7 cents on the dollar, up from par when the notes were issued, according to Trace bond trading data.

"Its credit standing has taken a severe knock in recent years due to various risk management misses," said Bloomberg Intelligence strategist Jeroen Julius. The lender's liquidity suffered from the recent turmoil as a result, Julius wrote in December.

The bank has about $24 billion in bond maturities this year. To further shore up its finances, Credit Suisse recently raised about 4 billion francs through a rights issue and selling shares to key investors including the Saudi National Bank. Chairman Axel Lehmann 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, shrink trading operations and cut as many as 9,000 jobs.

The bank's long-term rating was downgraded by S&P Global Ratings in November to just above junk status, underscoring the challenges after it laid out the radical ovrhaul plans, which included a 4.03 billion franc loss in the third quarter and warnings of more losses to come in the final three months of the year.

S&P cut the Swiss bank's long-term rating to BBB- from BBB, with a stable outlook. That's just above the BB "speculative grade." The U.S. ratings firm, echoing several analysts, said it sees "material execution risks amid a deteriorating and volatile economic and market environment" for the bank. It also signaled that some details around the lender's planned asset sales remain "unclear."

The coupon on the most recent bond issue compares with rivals such as Dutch lender Rabobank. It issued two-year debt, but at a spread of 65 basis points over Treasuries.

The U.S. bond sale follows a surge in issuance Tuesday, where 19 borrowers sold about $34 billion across more than 40 tranches in the first business day of 2023. At least 13 high-grade companies issued debt in the investment-grade bond market Wednesday, adding another $19.5 billion to the week's tally. Many blue-chip firms are looking to lock in funding costs before any economic downturn pushes risk premiums higher.

Credit Suisse was the sole book runner on that sale.

Olivia Raimonde, Brian Smith and Colin Keatinge report for Bloomberg News.

Copyright 2023 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.