Investment Bank

Mergers and acquisitions

Mergers and acquisitions activity remained strong. In first half 2007, we advised globally on 248 transactions with a deal volume of USD 582 billion, according to Thomson Financial, which corresponded to an increase of 81% from the same period last year. Key deals in second quarter included:

– joint financial advisor to global banking group ABN AMRO on the EUR 66 billion recommended merger with Barclays as well as the related USD 21 billion sale of LaSalle to Bank of America and the Royal Bank of Scotland/Fortis/Santander consortium approach

– joint financial advisor on Italian power company Enel's EUR 64 billion joint public offer with Spanish company Acciona for the remaining share capital of Endesa, a Spanish-based electric utility company. UBS was also joint lead arranger and joint bookrunner on the financing of this transaction

– sole financial advisor to the Board of Directors of aluminum company Alcan on the USD 44 billion recommended offer from Rio Tinto which follows Alcoa's earlier USD 33 billion unsolicited takeover bid

– lead financial advisor to Sallie Mae, the leading provider of student loans in the US, on its USD 25 billion sale to a consortium led by J.C. Flowers & Co., Bank of America and JPMorgan Chase.

Equity underwriting

UBS global equity capital market deal volumes were USD 22.3 billion in second quarter, up 15% compared with the same period last year, according to Dealogic. We were bookrunner for more deals than any other firm and had a 7.7% market share of the global equity issuance in the quarter. Key transactions included:

– joint bookrunner on the USD 2.7 billion accelerated bookbuild offering of TeliaSonera, a leading telecommunications company in the Nordic and Baltic regions

– joint global coordinator and joint bookrunner on the HKD 8.1 billion IPO of China Molybdenum, the leading integrated producer of molybdenum, a metal ore, and a growing producer of tungsten

– joint global coordinator and joint book-running manager on the USD 1.2 billion convertible notes offering from Chesapeake Energy Corporation, the third largest independent producer of natural gas in the US.

Fixed income underwriting

The second quarter generally saw favorable financing conditions. However, towards the end of the quarter, investor enthusiasm diminished on the weakness in equity markets, increases in government yields and concerns about US sub-prime mortgage markets, which created tighter credit conditions. UBS's market share of primary bond issuance improved in first half 2007 to 4.1%, compared with 3.6% in the same period last year. We lead managed 143 deals during second quarter, including:

– joint bookrunner on a EUR 1.5 billion perpetual tier 1 deal for reinsurance company Munich Re

– joint lead arranger and joint bookrunner on a EUR 35 billion syndicated loan facility and joint bookrunner on a EUR 5 billion multi-tranche financing for Enel, as part of the financing related to Enel's acquisition of Endesa

– joint bookrunner on a USD 400 million 10-year deal for Colombian bank Bancolombia, its debut international debt issue.