UBS, Switzerland's largest investment bank (IB), which rapidly acquired Credit Suisse (CS) amid crisis rumors, has proposed to publicly repurchase bonds worth 2.75 billion euros (approximately 3.8 trillion KRW) that were sold just before the acquisition.
According to Bloomberg on the 22nd (local time), UBS announced that it will redeem senior unsecured bonds maturing in March 2028 and March 2032.
The total bond amount is 2.75 billion euros, and these bonds were issued on the 17th, two days before UBS acquired CS. The bonds maturing in March 2028 were sold with a fixed interest rate of 4.625%, and the bonds maturing in March 2032 were sold with a fixed interest rate of 4.750%.
UBS explained that the decision to redeem was made to provide an option for those who invested in the bonds before the acquisition date without knowing about the CS acquisition, allowing them to resell the bonds.
Bloomberg reported that UBS's bond prices rose after this proposal was made.
The UBS bond repurchase proposal appears to be a measure to ease the heightened market anxiety following the CS acquisition. In particular, investor anxiety has increased further after Swiss financial authorities announced plans to fully write off contingent convertible bonds (AT1) worth 22.6 trillion KRW among CS's bonds during the UBS acquisition process, causing investor losses.
UBS's stock price, which had fallen to 14.68 Swiss francs intraday on the 20th, the day after the CS acquisition announcement, has shown a recovery trend, recording 18.70 Swiss francs as of 5 p.m. that day.
After being incorporated into UBS, CS is expected to undergo large-scale layoffs, and its stock price began to fall below 1 Swiss franc starting from the 20th, the day after the acquisition. As of 5 p.m. that day, it was trading at 0.92 Swiss francs.
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