UBS offloads subprime risks
Switzerland's biggest bank, UBS, says it has finalised the sale of $15 billion (SFr15.56 billion) of mortgage-backed securities to investment management firm BlackRock.
The United States securities – mostly subprime and so-called Alt-A residential mortgages – have a nominal value of $22 billion, with New York-based BlackRock getting a 32 per cent discount as part of the deal.
BlackRock will try to sell the mortgages when the markets recover and has held similar discussions with financial institutions around the world.
UBS, Europe’s biggest casualty of the subprime crisis, segregated related assets in January.
“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,” said UBS CEO Marcel Rohner in a statement.
UBS announced earlier this month plans to cut about 5,500 jobs, or seven per cent of its workforce, after reporting a first-quarter loss of SFr11.5 billion ($11.1 billion).
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