UPDATE 1-Credit Suisse signed Babcock longevity deal-source

LONDON May 12 (Reuters) - Credit Suisse (CSGN.VX) was the counterparty to a longevity swap used by Babcock International (BAB.L) to hedge against life expectancy risk in its pension scheme, a source close to the transaction said on Tuesday.

The British engineering group said earlier on Tuesday it would use a swap to hedge 500 million pounds ($758.6 million) worth of exposure to longevity risk [ID:nLB600429].

Babcock finance director Bill Tame declined to name the investment bank involved in the 20-year deal, which is the first of its kind to be struck by a UK corporate scheme.

The longevity swap applies to the longevity exposure of retired workers only.

Credit Suisse declined to comment. ($1=.6591 Pound)