Swiss investment banking company UBS has agreed to sell Credit Suisse’s former Securitised Products business Atlas to US-based asset management firm Apollo Global Management.
The proposed sale is part of UBS’ efforts to offload non-core assets after it acquired the collapsed Swiss banking group last year.
Under the terms of the agreement, Apollo will purchase from UBS, Credit Suisse’s senior secured financing facilities, worth $8bn.
The agreement concludes ATLAS’ transition services agreement with UBS and UBS’ investment management agreement with Atlas.
It is a mutually beneficial agreement and is in line with UBS’ strategy of winding down and simplifying its non-core and legacy (NCL) portfolio.
UBS Group CEO Sergio Ermotti said: “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.”
Apollo CEO Marc Rowan said: “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 $24bn originations since inception and have secured capital to support over $40bn of client assets.”
UBS said that the agreement will help advance its plans to offload its NCL portfolio, while minimising any disruption to clients, and reducing risk-weighted assets and leverage ratio.
The investment bank Group expects around $300m net gain in the first quarter of 2024, from the conclusion of the agreements and Credit Suisse will be hit by a net loss of around $900m.
UBS said that the discrepancies are a result of its regulations in the second and third quarters of 2023, which were not recognised under Credit Suisse’s US GAAP accounting policies.
With the acquisition, Atlas will be transformed into a fully independent platform focused on investment-grade asset-backed origination, said the Swiss investment banker.
