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CS Acquisition – Federal Government and UBS Sign Agreement on Loss Guarantee – News

CS Acquisition – Federal Government and UBS Sign Agreement on Loss Guarantee – News

  • UBS and the Federal Government signed a CHF 9 billion loss guarantee contract for UBS’ acquisition of Credit Suisse.
  • The Federal Ministry of Finance (FDF) and UBS announced that the contract was signed on Friday.
  • There are strict federal warranty requirements, the FDF writes.

According to the agreement, the federal government will assume a loss guarantee of 9 billion Swiss francs in a specific portfolio of client services assets that are “difficult to value.” However, this only happens if UBS incurs losses in these assets of more than CHF 5 billion.

UBS must remain based in Switzerland

UBS is committed to managing assets in a manner that minimizes losses and maximizes realization returns. The federal government has comprehensive information and audit rights. The bank must maintain its headquarters in Switzerland.

UBS is also required to create a separate organizational unit and set up a supervisory committee to report to the union on a quarterly basis. The primary goal is to keep the financial and legal risks to the federal government and taxpayers as small as possible.

The acquisition date has been set

He informed the Federal Council in its meeting of the conclusion of the contract. The guarantee of loss had already been announced by the federal government when competitor UBS announced the acquisition of CS. At that time, the federal government agreed to bear a portion of any losses resulting from the acquisition.

UBS wants to take over CS on June 12, which is Monday, as announced at the beginning of the week. According to the FDF, a loss guarantee from the federal government is necessary to make the takeover possible.