REG-UBS AG UBS Group AG (UBS) and Apollo conclude investment management and transition services agreements as final step in carve-out of former Credit Suisse Securitized Products business, Atlas SP

UBS AGAnnouncement

27/03/2024 07:00

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UBS Group AG (UBS) and Apollo conclude investment management and transition
services agreements as final step in carve-out of former Credit Suisse
Securitized Products business, Atlas SP

 

Ad hoc announcement of Credit Suisse AG pursuant to Article 53 of the SIX
Exchange Regulation Listing Rules

UBS (NYSE:UBS) (SWX:UBSN) and Apollo today announced that they have entered
into an agreement pursuant to which ATLAS SP (Atlas) has concluded its
Transition Services Agreement with UBS and UBS will close out its Investment
Management Agreement with Atlas.

As part of this agreement, Apollo will purchase USD 8 billion of senior
secured financing facilities from UBS.

This mutually beneficial agreement aligns with UBS’s strategy of winding
down and simplifying its Non-Core and Legacy (NCL) portfolio and with
Apollo’s continued momentum in growing Atlas as a standalone origination
platform.

For UBS, these actions will allow the bank to further accelerate its plans to
unwind and more efficiently simplify its NCL portfolio, while minimizing any
disruption to clients, and reduce risk-weighted assets and leverage ratio
denominator in NCL.

UBS Group expects to recognize a net gain in the first quarter of 2024 of
around USD 0.3 billion from the conclusion of these agreements and the
assignment of the senior secured financing facilities while Credit Suisse AG
is expected to recognize a net loss of around USD 0.9 billion. The differences
reflect adjustments UBS Group made under IFRS as part of the purchase price
allocation at the closing of the acquisition of Credit Suisse Group, as well
as provisions made by UBS Group in the second and third quarter of 2023 that
are not recognised under Credit Suisse AG’s US GAAP accounting policies.

For Atlas and Apollo, the agreement marks Atlas’ evolution into a fully
independent platform focused on investment grade asset-backed origination.

Commenting on the transaction, Sergio P. Ermotti, UBS Group CEO said:
“We’re pleased with this mutual agreement with Apollo. As we execute on
our integration plans, this is another example of our relentless focus on
working with clients and counterparties to free up capital from Non-Core
activities and reducing costs and complexity.”

Marc Rowan, CEO of Apollo, also commented: “We are pleased to finalize the
Atlas transition in partnership with UBS, in an economically neutral manner
for our firm. This caps off a quarter marked by record origination and capital
raising for Atlas, where we have generated USD 24 billion originations since
inception and have secured capital to support over USD 40 billion of client
assets.”

Cautionary Statement Regarding Forward-Looking Statements

This media release contains statements that constitute “forward-looking
statements,” including but not limited to management’s outlook for UBS’s
financial performance, statements relating to the anticipated effect of
transactions and strategic initiatives on UBS’s business and future
development and goals or intentions to achieve climate, sustainability and
other social objectives. While these forward-looking statements represent
UBS’s judgments, expectations and objectives concerning the matters
described, a number of risks, uncertainties and other important factors could
cause actual developments and results to differ materially from UBS’s
expectations. For a discussion of the risks and uncertainties that may affect
UBS's future results please refer to the "Risk Factors" and other sections of
UBS’s most recent Annual Report on Form 20-F, quarterly reports and other
information furnished to or filed with the US Securities and Exchange
Commission on Form 6-K, and the cautionary statement on the last page of this
presentation. UBS is not under any obligation to (and expressly disclaims any
obligation to) update or alter its forward-looking statements, whether as a
result of new information, future events, or otherwise.

UBS Group AG and Credit Suisse AG

Investor contact

Switzerland: +41-44-234 41 00

Media contact

Switzerland: +41-44-234 85 00

UK:+44-207-567 47 14

Americas:+1-212-882 58 58

APAC:+852-297-1 82 00

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