UBS buying back bonds issued before Credit Suisse takeover

In a bid to reassure investors, UBS said that it will buy bonds issued shortly before taking over the crisis-hit Credit Suisse.

UBS, Switzerland's biggest bank, issued bail-in bonds on Friday, two days before taking over Credit Suisse, in a deal orchestrated by the Swiss regulators.

As per a Bloomberg report, Switzerland’s biggest bank invited holders of $3 billion of its senior bonds to sell them back after acquisition in an effort to calm concerns over the risks of the deal.
UBS said the buy-back offer is open until April 4.

While shareholders have cheered UBS picking up its rival at a very cheap price, its bond prices have dropped in recent days and credit ratings companies have lowered their outlook on the bank’s debt.

Bail-in bonds are financial instruments that may banks may unilaterally convert into equity in times of crisis to absorb losses.