UBS to sell Credit Suisse distressed debt assets individually
UBS Group has moved away from Credit Suisse’s original plan to sell its US$250 million distressed-debt business to a single bidder after it failed to attract enough interest, and is instead planning to dispose of the assets individually.
The sale was called off late last year because bids were scarce and too low, according to sources familiar with the matter. The assets have been added to UBS’s special wind-down unit for Credit Suisse and are being sold on an individual basis, said the sources, who asked not to be named as the details are private.
Credit Suisse sought to exit distressed debt and special-situations trading earlier last year in an attempt to downsize and shore up confidence, just weeks before it was forced into the arms of its larger local rival in an emergency takeover. UBS is working through the assets inherited from Credit Suisse that it does not want, which amounted to an estimated US$77 billion as at the end of the third quarter.
A spokesperson for UBS declined to comment on the sales.
The bank’s special situations and loan trading team was headed by Thomas Mathieson, and initial sale plans included the team being transferred to any firm that bought the assets, some of the sources said. Following the failed sale process, the team was disbanded towards the end of last year as part of a bigger overhaul of UBS’s credit team following the merger.
Some of the debt of that book has already been sold, some of the sources said.
The portfolio had as many as 30 trading positions, including a revolving credit facility of struggling auto-parts maker Standard Profil Automotive GmbH, as well as travel firm Thomas Cook Group, which collapsed in 2019.
UBS is also struggling to offload the investment-banking franchise it inherited from Credit Suisse in China, as geopolitical tensions mount and the world’s second-largest economy endures a prolonged slowdown. BLOOMBERG
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