By Lars Mucklejohn
UBS and private equity giant Apollo Global Management have finalised a deal to sell $8bn worth of Credit Suisse’s securitised products as the bank winds down non-core businesses of its former rival after acquiring it last year.
Apollo will buy $8bn of senior secured financing facilities from the Swiss banking giant, while the two groups also agreed to end an investment management agreement that was part of Apollo’s initial deal to snap up Credit Suisse’s New York-based securitisation unit in 2022.
The division, which Apollo rebranded as Atlas, packaged wealthy clients’ debts and sold them on as securities.
UBS has been trying to renegotiate the deal over the last year, after Credit Suisse disclosed that the investment management agreement would deliver it a $600m loss.
The bank said on Wednesday that it would book a $300m gain from the sale, while Credit Suisse would incur a $900m loss.
UBS is in the process of winding down non-core businesses tied to Credit Suisse after acquiring it for $3.2bn in a landmark state-brokered deal last March.
The bank plans to cut around $13bn in costs as a result of the merger, with around half coming from staff costs.
“This mutually beneficial agreement aligns with UBS’s strategy of winding down and simplifying its non-core and legacy portfolio and with Apollo’s continued momentum in growing Atlas as a standalone origination platform,” the companies said in a joint statement.
Marc Rowan, chief executive of Apollo, said the two parties finalised the deal in an “economically neutral manner for our firm”.
He added: “This caps off a quarter marked by record origination and capital raising for Atlas, where we have generated $24bn originations since inception and have secured capital to support over $40bn of client assets.”
