UBS has completed the sale of around $15 billion of primarily sub-prime and Alt-A US residential mortgage-backed securities to a newly-created distressed asset fund that will be managed by global investment management firm BlackRock.
Marcel Rohner, group chief executive officer of
UBS, said: “Risk reduction remains a critical part of our ongoing financial restructuring and this sale is a big step towards further reducing our positions in this asset class. We continue to manage our legacy risks in a flexible and creative way in the best interests of our shareholders.”
UBS sold positions with a nominal value of approximately $22 billion to the new fund for an aggregate sale price of approximately $15 billion. Based on
UBS categorisations, the vast majority of the positions are sub-prime and Alt-A in roughly equal parts and the remainder is prime.
The fund purchased the securities using approximately $3.75 billion in equity raised by BlackRock from investors and a multiyear collateralised term loan of approximately $11.25 billion provided by
UBS. Further terms were not disclosed.
