UBS Completes the Sale of USD $15 Billion of U.S. Real Estate Related Assets to BlackRock

UBS announced today that it has closed on the sale of approximately USD $15 billion of primarily Subprime and Alt-A US residential mortgage-backed securities to a newly created distressed asset fund that will be managed by BlackRock, the global investment management firm.

Marcel Rohner, Group Chief Executive Officer of UBS said, “Risk reduction remains a critical part of our ongoing financial restructuring and this sale is a big step towards further reducing our positions in this asset class. We continue to manage our legacy risks in a flexible and creative way in the best interests of our shareholders.”

Jerker Johansson, Chairman and CEO of UBS Investment Bank said, “BlackRock proved to be an ideal partner for this venture. Through BlackRock Solutions they were able to provide leading analytic, structuring and advisory services."

UBS sold positions with a nominal value of approximately USD $22 billion to the new fund for an aggregate sale price of approximately USD $15 billion. Based on UBS categorizations, the vast majority of the positions are Subprime and Alt-A in roughly equal parts and the remainder is Prime. The fund purchased the securities using approximately USD $3.75 billion in equity raised by BlackRock from investors and a multi-year collateralized term loan of approximately USD $11.25 billion provided by UBS.

The transaction has closed, and further terms were not disclosed.