Swiss authorities brokered the controversial emergency rescue of Credit Suisse by UBS for 3 billion Swiss francs ($3.37 billion) over the course of a weekend in March.
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UBS and the Swiss government announced Friday that they had signed a loss protection agreement which will come into effect once the takeover of Credit Suisse is completed.
The agreement will see the Swiss government cover losses of up to 9 billion Swiss francs ($10 billion) following UBS’ acquisition of its rival.
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“As part of the agreement, the Swiss government guarantees losses of up to CHF 9bn if realized on a designated portfolio of Credit Suisse non-core assets once UBS bears the first CHF 5bn of any realized losses,” UBS said in a statement.
“UBS will manage these assets in a prudent and diligent manner and intends to minimize any losses and maximize value realization on these assets.”
The acquisition of Credit Suisse is expected to take place as early as June 12, UBS said.
This is a developing story and will be updated shortly.
