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UBS buys back US$6.1b of debt, bonds in public tender

UBS Asset Management said turmoil in China's stock market will help extend a bull run in the nation's bonds, as investors channel more funds into debt securities to avoid equity volatility.

[LONDON] UBS said it purchased about 6.1 billion francs (S$8.7 billion) of senior and subordinated debt in a public tender aimed at lowering interest expenses.

Offers for 14 securities were accepted as of the Dec 15 deadline, UBS said in a statement on Thursday. Switzerland's biggest lender had offered to buy back 17 issues of debt and bonds with an aggregate principal of about 16 billion francs. The bank expects to book an expense of 272 million francs in the fourth quarter related to the transaction.

The transaction will have an "immaterial effect" on the bank's CET1 capital ratio, a measure of financial strength, UBS said in the statement.