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UBS Completes the Sale of USD $15 Billion of U.S. Real Estate Related Assets to BlackRock
UBS has continued its commitment to Asian golf, announcing contract extensions for its two flagship tournaments that will take partnerships in key markets Hong Kong and Japan into 2009.
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.
The UBS Hong Kong Open, played annually in November, and the UBS Japan Golf Tour Championship, to be contested in early July, are considered among the finest tournaments in Asia Pacific golf. UBS has been supporting both events since 2005.
The agreements, which were due to conclude at the end of 2008, have been extended by an additional year and will bring continued sponsorship opportunities for brand, business and employee benefit.
Said Kathryn Shih, Head of Wealth Management, Asia Pacific: "Being one of the leading professional golf tournaments in Asia and one of the most important events in Hong Kong, the UBS Hong Kong Open has been an integral part of our business here for the last three years.
"The unique entertainment opportunities and the quality of the tournament have made it one of the 'must-attend' events in Hong Kong, which makes it an excellent tool to attract our very best clients and prospects as well as strengthen our brand.
"Overall, we entertained around 3,800 clients across the three years and generated HKD98 million, which is about USD13 million of media value, something that figures to only increase as we celebrate the tournament's 50th year in November," said Shih.
Added Susumu Omori, President of UBS Securities Japan Ltd: "For our business, success comes through building long-term commitments with local partners that share our values. For that reason, I am delighted that we have reached agreement to extend our partnership with the Japan Golf Tour.
"The UBS Japan Golf Tour Championship provides both outstanding opportunities to engage our clients in unique ways and also to expand our brand recognition. Just as importantly, it highlights our commitment to the Japan market, something that is further reinforced by the extension of this partnership," added Omori.
Oliver Bertschinger, Head of Sponsorship, UBS Asia Pacific, explained that, although contrary to its normal long-term sponsorship approach, the bank was seeking only one-year extensions.
"UBS has been reviewing our global sponsorship strategy since late 2007, with the aim of having a new strategy in place for 2009 onwards. Globally, all contract extensions due in 2008 are therefore limited to one year only.
"So, although one-year extensions are not our normal practice, within the current restrictions these extensions are clear testimony to the outstanding success of the UBS Hong Kong Open and the UBS Japan Golf Tour Championship for our business and brand in two of our most important Asia Pacific markets and, indeed, pan-regionally," said Bertschinger.
In Hong Kong, 2007 was a great success from all perspectives, from a record number of clients entertained, outstanding media value and television coverage, as well as record public attendance.
The event - the third oldest national Open in Asia - will celebrate its 50th year in November, a remarkable landmark for golf in this region and the backbone for plans for even greater spectacle in 2008 and beyond.
Meanwhile, in Japan, UBS's partnership with the Japan Golf Tour Organisation, custodians of the tournament, has delivered outstanding benefits in Japan's 'players championship'.
Record ratings last year on national free-to-air broadcaster NHK delivered the UBS brand to millions of viewers across Japan, coverage that only stands to grow in 2008 with the expected participation of young superstar Ryo Ishikawa, who has dramatically increased the already high interest in Japanese men's golf.
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