UBS agreed to acquire rival lender Credit Suisse for approximately $3.25bn in an all-share transaction.
As part of the deal, Switzerland’s central bank would make available a 100bn Swiss franc liquidity line to UBS.
Under the terms of the agreement, should UBS incur in more than 5bn Sfr in losses from Credit Suisse’s assets, the Swiss government would shoulder the next 9bn sfr in red ink with UBS taking any losses above that amount.
UBS chairman, Colm Kelleher, said that Credit Suisse’s investment bank would be shrunk, which might scupper plans for a spin-off of CS First Boston.
— More to follow —
— More to follow —
