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Credit Suisse: Swiss government agrees €9.2bn loss guarantee deal with UBS
New deal removes one of the final blockages to the €3.3bn rescue takeover by UBS of Credit Suisse Group
Assets to be covered includes primarily loans, derivatives, legacy assets and structured products from Credit Suisse’s non-core unit.
Picture: Michael Buholzer/Keystone/AP
FRI, 09 JUN, 2023 -
MARION HALFTERMEYER
UBS sealed an agreement with the Swiss government to cover 9bn francs (€9.2bn) of losses it could incur from the rescue of Credit Suisse Group, clearing the last major hurdle to closing the historic takeover.
The accord was signed on June 9 and will cover a specific portfolio of Credit Suisse assets, corresponding to about 3% of the merged banks’ combined assets, the government said in a statement. That represents about 44 billion francs.
The deal removes one of the final blockages to the $3.3bn (€3bn) takeover, which was brokered by the government in March as Credit Suisse hurtled toward bankruptcy. UBS had pushed for protection from hard-to-predict losses from a set of its former rival’s assets it plans to wind down or sell. With the government accord now in place, the merger may close as soon as Monday, creating a financial titan twice the size of the Swiss economy.
Under the terms, UBS will assume the first 5bn francs of losses, with the government stepping up to take on the next 9bn francs. The portfolio of assets to be covered includes primarily loans, derivatives, legacy assets, and structured products from Credit Suisse’s non-core unit.
A net approach will be taken when calculating losses, meaning any profits from the portfolio will also be taken into account.
Bloomberg
FRI, 09 JUN, 2023 -
MARION HALFTERMEYER
UBS sealed an agreement with the Swiss government to cover 9bn francs (€9.2bn) of losses it could incur from the rescue of Credit Suisse Group, clearing the last major hurdle to closing the historic takeover.
The accord was signed on June 9 and will cover a specific portfolio of Credit Suisse assets, corresponding to about 3% of the merged banks’ combined assets, the government said in a statement. That represents about 44 billion francs.
The deal removes one of the final blockages to the $3.3bn (€3bn) takeover, which was brokered by the government in March as Credit Suisse hurtled toward bankruptcy. UBS had pushed for protection from hard-to-predict losses from a set of its former rival’s assets it plans to wind down or sell. With the government accord now in place, the merger may close as soon as Monday, creating a financial titan twice the size of the Swiss economy.
Under the terms, UBS will assume the first 5bn francs of losses, with the government stepping up to take on the next 9bn francs. The portfolio of assets to be covered includes primarily loans, derivatives, legacy assets, and structured products from Credit Suisse’s non-core unit.
A net approach will be taken when calculating losses, meaning any profits from the portfolio will also be taken into account.
Bloomberg
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