(Reuters) – UBS Group on Wednesday announced plans to buy back 2.75 billion euros of its own bonds issued less than a week ago, in a move designed to bolster investor confidence shaken by the group’s decision to acquire Credit Suisse, as part of a rescue plan orchestrated by the Swiss authorities.
These bonds, issued on March 17, include securities of 1.5 billion euros with a yield of 4.625% for a maturity in March 2028 and securities of 1.25 billion euros with a yield of 4.750% for a maturing in March 2032, UBS said in a statement.
Since the announcement over the weekend of the takeover of Credit Suisse by UBS for three billion Swiss francs (3.01 billion euros), the value of UBS stocks and bonds has fluctuated sharply.
UBS shares fell 17% after markets opened on Monday, before ending Tuesday 35% above their session low. On Wednesday, it was trading at 19.36 francs, down 0.33%.
According to Refinitiv data, the 7% dollar Additional tier 1 (AT1) bond yield jumped to a record high of 29.8% on Tuesday, from still under 10% just a year ago. week. The yield on these bonds was on Wednesday at 18.7%.
As part of Credit Suisse’s bailout, Swiss regulators ruled that the value of Credit Suisse’s AT1 securities would drop from $16 billion to zero, surprising investors with losses usually coming first borne by equity holders before bondholders.
However, AT1s are a riskier contingent convertible bond than traditional debt.
(Report Akriti Sharma in Bangalore; Claude Chendjou, editing by Kate Entringer)
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