Risk concentrations

UBS has highly leveraged finance commitments entered into both before and after the market dislocation in July 2007. Transactions since this dislocation have typically had pricing terms and covenant and credit protection that are more favorable to underwriters and investors than those entered into in the first half of 2007, and are thus closer to the market conditions now prevailing. On 31 March 2008, commitments entered into by UBS before the dislocation ("old deals") amounted to USD 3.6 billion while those entered into subsequent to the dislocation ("new deals") totaled USD 5 billion.

These commitments are carried at fair value. On 31 March 2008, the cumulative markdown of these transactions was USD 522 million, reflecting the estimated cost of distribution, net of fees. Gross of fees, the cumulative markdown was USD 647 million. Gross markdowns in first quarter 2008 were USD 298 million.