UBS said it will buy back about $16.1bn of its own bonds, some of which will no longer count toward its capital after new Swiss rules come into effect in 2019.
Bloomberg News reports that the cash tender offer for the bonds will end on December 15, the bank said in a statement Friday. UBS expects to report a fourth-quarter expense on the transaction. The buyback will have an immaterial effect on the bank’s CET1 ratio, it said.
“Subordinated bonds subject to the offers are currently eligible as Tier 2 capital with a remaining capital content under the BIS Basel III phase-in rules, but will not be eligible for Tier 2 capital treatment on a fully-applied basis beginning in 2019,” UBS said in the statement.
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