UBS Finances 75% of Sale of its Distressed Assets


UBS financed 75 percent of the funding used by U.S. asset manager Blackrock to buy a $15 billion portfolio of distressed U.S. real estate assets from UBS, the bank said on Wednesday.


UBS completed the deal by providing $11.25 billion in loans to Blackrock, the Swiss-based bank said in a statement.

Blackrock raised $3.75 billion in equity from investors to pay for the rest of the package, UBS said.

Investors have welcomed the deal as a way for the troubled wealth manager, the world's largest, to prune its balance sheet and shed the type of assets that made it Europe's biggest
casualty of the subprime crisis.

UBS said the vast majority of the positions sold to the Blackrock-led group were subprime assets -- the lowest quality of real estate loans, and so-called Alt-A assets -- ranked one step above subprime, in roughly equal parts.

The remainder was ranked prime.

By publishing the financing details and the composition of the assets, UBS is providing more clarity to investors seeking more transparency about the structure of the deal.

Further terms of the deal were not disclosed.