The UBS Group Sells $8 Billion Of Credit Suisse Loans To Apollo

(CTN News) – In an agreement announced by UBS and Apollo, ATLAS SP (Atlas) has concluded its Transition Services Agreement with UBS and closed its Investment Management Agreement with Atlas.

The agreement provides for Apollo to purchase USD 8 billion in senior secured financing facilities from UBS.

It is important to note that this agreement is in line with strategy to simplify and wind down its Non-Core and Legacy (NCL) portfolio, as well as Apollo’s continued growth in Atlas as a standalone origination platform.

As a result of these actions, UBS will be able to further accelerate its plans to unwind and simplify its NCL portfolio in order to minimize any disruption to clients, and reduce the risk-weighted assets and leverage ratio denominator in NCL.

Following the conclusion of these agreements and the assignment of senior secured financing facilities, UBS Group is anticipated to recognize a net gain of approximately USD 0.3 billion in the first quarter of 2024, while Credit Suisse AG is expected to report a net loss of approximately USD 0.9 billion.

Furthermore, UBS Group made provision in 2023 that is not recognised in accordance with Credit Suisse AG’s US GAAP accounting policy, as part of the purchase price allocation in addition to the adjustments made under IFRS when the Credit Suisse Group acquisition was completed.

As a result of this agreement, Atlas is now a fully independent platform with an emphasis on investment grade asset-backed origination.

Sergio P. Ermotti, CEO of UBS Group, commented on the transaction:

“We are pleased with the agreement reached with Apollo.”. This is another example of how we are relentlessly focused on reducing costs and complexity while freeing up capital from non-core activities as we execute on our integration plans.”

We are pleased to complete the Atlas transition in partnership with UBS in a manner that is economically neutral for Apollo.

According to Apollo’s CEO, Marc Rowan, the transition will be economically neutral for Apollo. Atlas has achieved record originations and capital raising for the quarter, with USD 24 billion originated and USD 40 billion in assets secured for client investment.

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