UBS Group AG (UBS) and Apollo conclude investment management and transition services agreements as final step in carve-out of former Credit Suisse Securitized Products business, Atlas SP
27 Mars 2024 - 6:45AM
Business Wire
Regulatory News:
Ad hoc announcement of Credit Suisse AG pursuant to Article 53
of the SIX Exchange Regulation Listing Rules
UBS (NYSE:UBS) (SWX:UBSN) and Apollo today announced that they
have entered into an agreement pursuant to which ATLAS SP (Atlas)
has concluded its Transition Services Agreement with UBS and UBS
will close out its Investment Management Agreement with Atlas.
As part of this agreement, Apollo will purchase USD 8 billion of
senior secured financing facilities from UBS.
This mutually beneficial agreement aligns with UBS’s strategy of
winding down and simplifying its Non-Core and Legacy (NCL)
portfolio and with Apollo’s continued momentum in growing Atlas as
a standalone origination platform.
For UBS, these actions will allow the bank to further accelerate
its plans to unwind and more efficiently simplify its NCL
portfolio, while minimizing any disruption to clients, and reduce
risk-weighted assets and leverage ratio denominator in NCL.
UBS Group expects to recognize a net gain in the first quarter
of 2024 of around USD 0.3 billion from the conclusion of these
agreements and the assignment of the senior secured financing
facilities while Credit Suisse AG is expected to recognize a net
loss of around USD 0.9 billion. The differences reflect adjustments
UBS Group made under IFRS as part of the purchase price allocation
at the closing of the acquisition of Credit Suisse Group, as well
as provisions made by UBS Group in the second and third quarter of
2023 that are not recognised under Credit Suisse AG’s US GAAP
accounting policies.
For Atlas and Apollo, the agreement marks Atlas’ evolution into
a fully independent platform focused on investment grade
asset-backed origination.
Commenting on the transaction, Sergio P. Ermotti, UBS Group 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, also commented: “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.”
Cautionary Statement Regarding Forward-Looking
Statements
This media release contains statements that constitute
“forward-looking statements,” including but not limited to
management’s outlook for UBS’s financial performance, statements
relating to the anticipated effect of transactions and strategic
initiatives on UBS’s business and future development and goals or
intentions to achieve climate, sustainability and other social
objectives. While these forward-looking statements represent UBS’s
judgments, expectations and objectives concerning the matters
described, a number of risks, uncertainties and other important
factors could cause actual developments and results to differ
materially from UBS’s expectations. For a discussion of the risks
and uncertainties that may affect UBS's future results please refer
to the "Risk Factors" and other sections of UBS’s most recent
Annual Report on Form 20-F, quarterly reports and other information
furnished to or filed with the US Securities and Exchange
Commission on Form 6-K, and the cautionary statement on the last
page of this presentation. UBS is not under any obligation to (and
expressly disclaims any obligation to) update or alter its
forward-looking statements, whether as a result of new information,
future events, or otherwise.
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