UBS (UBSG.S) announced on Friday that it had reached a deal with the Swiss government under which the latter will compensate the bank for losses of up to 9 billion Swiss francs ($10.01 billion) incurred as a result of its emergency takeover of Credit Suisse (CSGN.S).
The government announced it would “guarantee UBS for any losses incurred in liquidating Credit Suisse assets” to facilitate the takeover.
Losses from the liquidation of these assets must be more than 5 billion Swiss francs for the guarantee to kick in, and the overall guarantee amount is capped at 9 billion, the document reads.
This is in line with the conditions of the takeover organized by Swiss authorities in March to facilitate Credit Suisse’s rescue, according to which UBS agreed to cover the first 5 billion francs in potential losses, and the government would shoulder up to 9 billion francs.
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