UBS to Sell Credit Suisse Loans to Italian Firms

UBS Group is reportedly divesting its exposure to loans extended by Credit Suisse to low-rated Italian companies. The sale, facilitated by Goldman Sachs Group, is expected to be completed in the first half of January.

UBS Group is reportedly in the process of divesting its exposure to a portfolio of loans extended by Credit Suisse to low-rated Italian companies. According to sources familiar with the matter, the Swiss bank is looking to exit the revolving credit facilities for five borrowers. The sale is being facilitated by Goldman Sachs Group on behalf of UBS, with the debt sizes ranging from €10 million to €40 million. Bids for Credit Suisse’s positions are expected to be due in the first half of January.

Representatives for UBS and Goldman Sachs declined to comment on the matter. Meanwhile, a full list of the borrowers includes Rekeep, Marcolin, Fabbrica Italiana Sintetici, Itelyum, and Rossini. Notably, representatives for Rekeep and Marcolin declined to comment, while those at Fabbrica Italiana Sintetici, Itelyum, and Rossini did not respond to requests for comment.

It's worth noting that the Italian package of loans may have a limited pool of potential buyers due to regulatory requirements mandating local banking licenses for lending activities. Additionally, the final weeks of the calendar year typically see heightened activity in credit trading as banks seek to reduce risk from their balance sheets.

UBS has been scrutinizing Credit Suisse assets since completing the acquisition of the smaller rival in June, as part of its efforts to ensure that the acquired businesses align with its risk approach. The bank has also established a wind-down unit, known as Non-core and Legacy, to manage businesses brought over from Credit Suisse that do not align with its strategy. However, this move led to UBS reporting its first quarterly loss in almost six years, with the wind-down unit widening its quarterly pretax loss to $1.93 billion.

UBS Group's decision to sell its exposure to the portfolio of loans made by Credit Suisse to Italian companies reflects its strategic efforts to align with a more conservative risk approach and streamline its acquired businesses.