UBS and Swiss Government Agree on Loss Protection Plan for Credit Suisse Takeover
UBS and the Swiss government have agreed on a loss protection plan for UBS's takeover of Credit Suisse.
The plan includes a guarantee for up to 9 billion Swiss francs ($10 billion) in losses from the sale of Credit Suisse assets, which will only be activated if UBS incurs losses beyond 5 billion francs.
The government's money will not come for free, as UBS will have to pay various fees and premiums.
The agreement covers a portfolio of Credit Suisse assets with a volume of around 44 billion Swiss francs and is limited to 3% of the combined assets of the merged group.
The agreement will remain in place until the final realization of the Credit Suisse assets.
The FDIC and JPMorgan Chase negotiated the loss protection agreement for the failed BankUnited over a period of several weeks, while the emergency takeover was hastily arranged over a weekend.