UBS Group Funding (Switzerland) AG’s $2.5 Billion Tier 1 Capital Notes Offering

UBS Group Funding (Switzerland) AG (the Issuer) successfully completed its issuance of USD 2.5 bn 7.00 per cent. Tier 1 Capital Notes, which are guaranteed by UBS Group AG.

The Notes are “high-trigger” regulatory capital instruments that are eligible to fulfill UBS Group AG’s Swiss going concern requirements. The Notes are the first regulatory capital instruments eligible for Swiss going concern requirements issued by UBS that were also placed in the United States with qualified institutional buyers in reliance on Rule 144A.

The Notes feature a full contractual write-down if (among other events) UBS Group AG’s consolidated common equity tier 1 capital falls below 7 per cent. of its consolidated risk weighted assets (a so-called “Trigger Event”). This means that, in the case of the occurrence of a Trigger Event, the Notes will be fully written-down prior to, or at the latest concurrently with, UBS Group AG’s other outstanding (high-trigger and low-trigger) regulatory capital write-down instruments. Since the Notes are eligible to fulfill Swiss going concern requirements, they also qualify for an exemption from the Swiss withholding tax that would normally be applicable to bonds directly issued by the Swiss-domiciled Issuer. The Notes are traded on the SIX Swiss Exchange.

Homburger advised UBS with respect to all regulatory and transactional aspects of Swiss law. The Homburger team included partners Benedikt Maurenbrecher (picture), Stefan Kramer (both Banking and Finance | Capital Markets) and Stefan Oesterhelt (Tax), as well as counsel Lee Saladino and associates Andreas Josuran and Andrea Ziswiler (all Banking and Finance | Capital Markets).

Involved fees earner: Andreas Josuran – Homburger; Stefan Kramer – Homburger; Benedikt Maurenbrecher – Homburger; Stefan Oesterhelt – Homburger; Lee Saladino – Homburger; Andrea Ziswiler – Homburger;

Law Firms: Homburger;

Clients: UBS AG;