UBS and Apollo announced that they have entered into an agreement under which ATLAS SP has concluded its Transition Services Agreement with UBS, and UBS will close out its Investment Management Agreement with Atlas. As part of this deal, Apollo will purchase $8 billion of senior secured financing facilities from UBS.
This agreement aligns with UBS’ strategy of winding down and simplifying its Non-Core and Legacy (NCL) portfolio and with Apollo’s continued momentum in growing Atlas as a standalone origination platform.
For UBS, this deal enables the bank to accelerate its plans to unwind further and simplify its NCL portfolio more efficiently while minimizing any disruption to clients and reducing risk-weighted assets and leverage ratio denominators in NCL.
UBS Group expects a net gain in Q1 2024 of around $0.3 billion from the conclusion of these agreements and the assignment of the senior secured financing facilities. Credit Suisse AG is expected to recognize a net loss of around $0.9 billion. And the differences reflect adjustments UBS Group made under IFRS as part of the purchase price allocation at the closing of the acquisition of Credit Suisse Group and provisions made by UBS Group in the second and third quarters of 2023 that are not recognized under Credit Suisse AG’s US GAAP accounting policies.
This agreement marks Atlas’ evolution into a fully independent platform focused on investment-grade asset-backed origination for Atlas and Apollo.
KEY QUOTES:
“We’re pleased with this mutual agreement with Apollo. As we execute on our integration plans, this is another example of our relentless focus on working with clients and counterparties to free up capital from Non-Core activities and reducing costs and complexity.”
– Sergio P. Ermotti, UBS Group CEO
“We are pleased to finalize the Atlas transition in partnership with UBS, in an economically neutral manner for our firm. This caps off a quarter marked by record origination and capital raising for Atlas, where we have generated USD 24 billion originations since inception and have secured capital to support over USD 40 billion of client assets.”
– Marc Rowan, CEO of Apollo
