UBS buys $3 billion in bonds after acquiring Credit Suisse

UBS announced on Wednesday (March 22, 2023) that it will buy back €2.75 billion ($2.96 billion at current prices) of debt securities sold days earlier. The goal is to restore investor confidence after acquisition From Credit Suisse on Sunday (March 19). Here it is advertisement Official Swiss bank (95 KB, in English).

“Source [UBS] I decided to launch this exercise as a result of a judicious assessment of these recent developments and a long-term commitment to credit investors.”the Swiss bank wrote in the note.

UBS will recall the previously sold unsecured redemption notes on March 9, 2023, which includes a fixed-rate note of €1.5 billion, 4.625% due March 2028 and another €1.25 billion, 4.750% due March 2032.

According to UBS, the shows started on the fourth day, with early due dates on March 28, 2023 and final due on April 4, 2023.

Understand the issue

On March 14, 2023, Credit Suisse Group AG informed has been defined “material weaknesses” In your financial reports for the past two years. This announcement was made in the annual report for 2022.

The other day, March 15, 2023, banking stocks fell by 30.8% to their lowest level today, which led to a decline in the global banking sector. In Brazil, the five major financial institutions in B3 (Sao Paulo Stock Exchange) lost R$35.7 billion in market capitalization in 4 trading sessions from March 8th to 14th.

hours later, financial times It reported that executives of investment banks held meetings with representatives of the Swiss Central Bank and Finma (the Swiss financial market supervisory authority). Also according to the paper, Credit Suisse has asked the monetary authorities to issue a public statement of support.

Subsequently, the Swiss Central Bank advertiser That would provide liquidity support to Credit Suisse. These statements were made in a joint announcement with FENMA.

“Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks. If necessary, the Swiss National Bank [Banco Nacional da Suíça] CS will save [Credit Suisse] liquidityThe note said.

In response, Credit Suisse announce which is expected to borrow $54 billion (about 50 billion Swiss francs) from the Swiss central bank through a covered loan facility and a short-term liquidity facility.

On March 16, 2023, Credit Suisse shares go up 19.15% with the announcement of the liquidity injection. The rally occurred one day after recording a sharp drop of 24.11%.

On the same day, the news agency Reuters Reported that the American shareholders of Credit Suisse lawsuit Swiss Investment Bank. They claim that there is fraud on the part of the institution by concealing information about the bank’s finances.

The lawsuit was filed in federal court in Camden City, New Jersey. Among the defendants are Credit Suisse CEO Ulrich Korner and Chairman of the Board Axel Lehmann.

On Monday (March 20), A.J Reuters Published that the government and the Swiss Central Bank must availability More than 280 billion US dollars to Credit Suisse and UBS banks with the aim of protecting the country from eventual turmoil in the global market.