Swiss banking giant UBS AG is expected to announce today plans to exit the municipal bond business and put its muni group up for sale as it seeks to recover from losses the bank has said could total $12 billion, sources said yesterday.

The firm’s leadership told employees of UBS Securities  in a phone call late yesterday that UBS would close down the muni bond department, officially putting the group on the selling block today, sources said. It is an announcement set to coincide with its parent bank’s release of its first-quarter earnings, which are expected to show losses related to the subprime mortgage market, the sources said.

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