UBS Sells $1 Billion of Capital Instruments

UBS, Tier 1 debt issue, first since Brexit

A $1 billion issue of bank debt by UBS this week was met with strong interest from investors, a person familiar with the matter told

The Swiss bank's issue of additional tier-1 securities are designed as capital that can absorb losses when the bank's financial falls below a certain level.

The coupon for the issue, a perpetual instrument, was set at 7.125 percent. The issue was priced on Wednesday and includes a 10 percent greenshoe, the person said.

First Post-Brexit Move

The securities are callable after five years and convert at 7 percent, according to the source. This puts them along UBS' other high-trigger instruments.

The issue, first reported by «Bloomberg», is the first of its sort since Britain's vote last month to leave the European Union rocked financial markets.

UBS' ratio of «hard» capital improved by 20 basis points to 14.2 percent in the second quarter. The bank's latest issue is an important indicator of market interest for rivals such as Credit Suisse, which targets 12 percent in «hard» capital by year-end.

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