LONDON â€" The Swiss bank UBS said Monday that it plans to buy back 1.75 billion euros, or about $2.37 billion, in bonds as it seeks to reduce the size of its balance sheet and its future interest expense.
The tender offer relates to five subordinated bonds in Swiss francs, euros or pounds and six senior unsecured bonds in Swiss franc, euro, Italian lira or pounds. The tender offer is set to expire on Dec. 13.
“This transaction is consistent with our proactive approach to reducing our balance sheet and future interest expense while maintaining our strong liquidity, funding and capital position,†UBS said.
In February, UBS announced plans to buy back 5 billion Swiss francs, or about $5.6 billion, of its bonds as part of a ongoing effort to reduce its balance sheet and interest costs. The bank, Switzerland’s largest, has been under pressure from regulators to increase the amount of cash it has available to deal with legal and compliance issues.
UBS said Monday that it expected to incur a small loss on the latest buyback, but believed that would be offset by a decrease in its future interest expense.
The transaction is expected to reduce its capital ratio by 0.2 percent to 0.5 percent.
