UBS said today that it has closed on the sale of roughly $15 billion of primarily subprime and Alt-A U.S. RMBS to a newly created distressed asset fund that will be managed by BlackRock.
Risk reduction remains a critical part of our ongoing financial restructuring and this sale is a big step toward further reducing our positions in this asset class," Marcel Rohner, group chief executive officer of UBS said in a release from the bank. "We continue to manage our legacy risks in a flexible and creative way in the best interests of our shareholders.
BlackRock proved to be an ideal partner for this venture," Jerker Johansson, chairman and CEO of UBS Investment Bank said. "Through BlackRock Solutions they were able to provide leading analytic, structuring and advisory services."
UBS sold positions with a nominal value of roughly $22 billion to the new fund for an aggregate sale price of approximately USD $15 billion, according to a release from the firm.
Based on UBS categorizations, the majority of the positions are subprime and Alt-A in roughly equal parts and the remainder is prime. The fund purchased the securities utilizing roughly $3.75 billion in equity raised by BlackRock from buyer and a multi-year collateralized term loan of roughly $11.25 billion provided by UBS, the release said.