UBS Group AG is offering to buy back 2.75 billion euros ($3 billion) worth of bonds it issued to investors just days before rescuing Credit Suisse Group AG.
(Bloomberg) — UBS Group AG is offering to buy back 2.75 billion euros ($3 billion) worth of bonds it issued to investors just days before rescuing Credit Suisse Group AG.
Switzerland’s biggest bank invited holders of its senior unsecured bail-in notes due in March 2028 and March 2032 to tender the securities for cash at their respective re-offer price, citing the “exceptional corporate actions” of March 19. That was the day UBS agreed to buy its rival in a government-brokered deal aimed at containing a financial market selloff sparked by the collapse of Silicon Valley Bank earlier this month.
“It seems fair and reasonable to let investors think twice if they need to reconsider the risks, which is helpful in shoring up sentiment eventually if not immediately,” said Gary Ng, senior economist at Natixis SA.
The offer opens on March 22, with the early expiration deadline on March 28 and the final expiration deadline on April 4, the bank said in a statement on Wednesday.
The two bonds priced on March 9, just as the first signs of trouble emerged at SVB. The 2032 note was indicated at a price of 99 cents at 3:36 pm in Hong Kong on Wednesday, below its re-offer price of 99.518 cents, according to Bloomberg-compiled data. The 2028 debt was indicated at 99.9 cents with a reoffer price of 99.932 cents.
“The issuer has decided to launch this exercise as a result of a prudent assessment of these recent developments and the Issuer’s long-term commitment to its credit investors,” UBS said in statement.
A spokesman for the lender wasn’t immediately available when contacted by Bloomberg in Zurich.
To view the relevant securities:
- UBS V4.625% 03/17/28
- UBS V4.75% 03/17/32
–With assistance from Kevin Kingsbury, Wei Zhou, Hannah Benjamin-Cook and Paul Cohen.
(Updates with quote in third paragraph, quote in fifth)
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