UBS has reportedly announced to buy back its bonds worth $3 billion issued to investors just days after it agreed to acquire the beleaguered Credit Suisse Bank. According to a statement made by UBS, the buyback offer starts on March 22, has an early expiration date of March 28 and a final expiration date of April 4.
The bank has announced that it will exchange the senior unsecured bail-in notes which are due in March 2028 and March 2032 at the re-offer price. The decision comes on the back of the March 19 deal when UBS acquired Credit Suisse for an exceptional sum of $3 billion.
The March 2032 bond was priced at 99 cents in Hong Kong on Wednesday which was below its re-offer piece of 99.518 cents and the March 2028 bonds were priced at 99.9 cents with its reoffer price being 99.932 cents, data compiled by Bloomberg showed.
The buyback offer is seen as an attempt by UBS to honour the commitment made to its investors. In a statement issued by the bank, it said, “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.”
In the aftermath of UBS’ takeover of its rival bank, AT1 bonds worth $17 billion issued by Credit Suisse were made worthless. UBS’ plan to acquire the crisis-hit Credit Suisse at $3 billion, which is less than its market value of $8 billion, was announced over the past weekend after the Swiss government stepped in as a broker to the deal. Following this, central banks around the world announced several coordinated measures to stabilise the volatility in the global banking sector.
