Closing Chapter: UBS And Apollo Wrap Up Agreements, Marking Carve-Out Of Former Credit Suisse Business

Zinger Key Points
  • UBS (NYSE: UBS) finalizes transition services with Apollo (NYSE: APO), including purchase of $8 billion in senior secured financing.
  • UBS aims to simplify its Non-Core and Legacy portfolio, expecting a net gain of $0.3 billion in Q1 2024.

UBS Group AG UBS inked a deal with Apollo Global Management Inc. APO, under which ATLAS SP has concluded its Transition Services Agreement with the Swiss bank.

As part of this deal, Apollo will purchase senior secured financing facilities worth $8 billion from UBS and the bank will close out its Investment Management Agreement with Atlas.

The deal is part of UBS’ strategy of winding down and simplifying its Non-Core and Legacy (NCL) portfolio while reducing risk-weighted assets and leverage ratio denominator in NCL.

UBS expects to recognize a net gain in the first quarter of 2024 of around $0.3 billion through these agreements and the assignment of the senior secured financing facilities.

However, Credit Suisse is expected to witness a net loss of around $0.9 billion from the agreements.

ReadCredit Suisse Consolidation Weighs On UBS, Stock Tanks On Q4 Performance

Sergio P. Ermotti, UBS CEO, said: “We’re pleased with this mutual agreement with Apollo. As we execute on our integration plans, this is another example of our relentless focus on working with clients and counterparties to free up capital from Non-Core activities and reducing costs and complexity.”

Marc Rowan, CEO of Apollo, said, “We are pleased to finalize the Atlas transition in partnership with UBS, in an economically neutral manner for our firm. This caps off a quarter marked by record origination and capital raising for Atlas, where we have generated USD 24 billion originations since inception and have secured capital to support over USD 40 billion of client assets.”

Price Action: UBS shares are up 0.47% at $31.30 on the last check Wednesday.

Photo via Shutterstock.

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