(March 22): UBS Group said on Wednesday (March 22) it would buy back €2.75 billion (RM13.2 billion) worth of debt it issued less than week ago, seeking to boost confidence among investors rattled by its US$3 billion rescue of rival Credit Suisse at the weekend.
The bonds in question, senior unsecured bail-in notes that were issued on March 17, include the €1.5 billion 4.625% fixed rate note due March 2028 and the €1.25 billion 4.750% fixed rate notes due March 2032, UBS said in a statement.
Since its government-backed rescue of Credit Suisse, UBS has seen the value of its shares and bonds gyrate wildly. UBS stock fell by as much as 17% after markets opened on Monday, only to close 35% higher than those lows the following day.
The yield on its 7% additional tier dollar bond — a form of bail-in note — jumped to a record 29.8% at one point on Tuesday, from below 10% just a week ago, according to Refinitiv data. Those bonds were last yielding 18.7%.
Part of the rescue package for Credit Suisse involved the company writing down to zero the value of US$16 billion in AT1 bonds, meaning those bondholders got nothing, while equity holders at least got the value of the share offer.
UBS shares were last flat on the day at 19.42 Swiss francs, having risen by as much as 3.6% in very early trading.