(Bloomberg) -- UBS Group AG plans to end a deal Credit Suisse struck with Apollo Global Management Inc. for the management of assets linked to its securitized products group.
Credit Suisse on Friday announced that it may incur a loss of about $600 million in the third quarter from a decision to “wind down certain management arrangements.” That refers to the deal with Apollo, according to people familiar with the matter who asked for anonymity discussing non-public information.
Bloomberg News reported previously that UBS was considering renegotiating parts of the Apollo deal, which Credit Suisse struck months before it was rescued by UBS in March of this year. Executives were particularly unhappy with the fees Credit Suisse had agreed to pay Apollo to manage assets that remained on its books.Credit Suisse agreed to sell the securitized products business, known as SPG, in an unsuccessful, last-ditch effort to win back investor confidence.
The transaction was scheduled to be completed in the first half of this year, and a “substantial first close” was already announced in February. The following month, UBS agreed to buy Credit Suisse in a government-brokered rescue. As part of the February “first close,” a large part of assets and employees were transferred to an Apollo subsidiary, Atlas SP. That transaction is completed and not affected by UBS plan to pull out of part of the deal, said one of the people. UBS’s decision to end the management agreement for the legacy assets won’t result in a windfall for Apollo, this person said.
The securitized products group bought and sold securities backed by pools of mortgages and other assets, such as car loans or credit-card debt. It traced its roots back to Wall Street’s raucous mortgage-bond scene in the 1980s. New York-based trader Jay Kim, who led the SPG, joined Apollo as part of the deal.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
UBS Takes Lead in $50 Billion Bond Market Left by Credit SuisseRival banks are flooding into a Credit Suisse-shaped hole in a resurgent market for arranging Swiss franc bond sales.
Read more »
UBS Invites Bidders for Credit Suisse’s China Brokerage BusinessUBS Group AG has reached out to a number of financial firms to gauge their interest in buying the Chinese brokerage venture of Credit Suisse, according to people familiar with the matter.
Read more »
UBS Near Settlement in Credit Suisse $1.5 Billion Tuna Bond CaseUBS Group AG is closing in on a settlement with the government of Mozambique over Credit Suisse’s role in a ship-financing scandal in the African country to resolve the case and avoid the scrutiny of a 13-week long London trial.
Read more »
Credit Suisse’s Part of Casino Credit Line to Be Sold at AuctionA Credit Suisse credit line to French grocer Casino Guichard-Perrachon is being sold in an auction on Friday, according to people familiar with the matter.
Read more »
Credit Suisse sheds nearly 13% of workforce this yearCredit Suisse has shed nearly 13% of its workforce this year, underlining the turmoil at the bank which was taken over by cross-town rival UBS in a state-engineered rescue earlier this year. The number of Credit Suisse employees fell to 33,968 at the end of June, down from 38,908 at the end of 2022, the bank said in its financial report published on Friday. Some of the jobs lost could be people who left as part of Credit Suisse's own cost cutting plans before the takeover or who jumped ship as confidence in the lender collapsed.
Read more »
DOJ probes UBS, Levi coverage, Marriott growth plan: Top StoriesThe U.S. Department of Justice is reportedly expanding its probe into the UBS Group (UBS) over alleged compliance failures on Russian sanctions. TD Cowen analysts initiate coverage on denim retailer Levi Strauss & Co. (LEVI), giving the brand an 'Outperform' rating. Marriott International (MAR) is expected to outline its three-year financial growth plan at its investor meeting today. Yahoo Finance Live's Seana Smith and Brad Smith take a look at several of this morning's top trending stocks. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Read more »