Homburger advised UBS Group Funding (Switzerland) AG on its issuance of EUR 1.75 bn Senior Fixed Rate / Fixed Rate Notes guaranteed by UBS Group AG under its Senior Debt Programme

On April 17, 2018, UBS Group Funding (Switzerland) AG (the Issuer) successfully completed its issuance of EUR 1.75 bn bail-inable (TLAC) notes under its Senior Debt Programme. The EUR 1.75 bn Senior Fixed Rate / Fixed Rate Notes due April 2025 (the Notes) will be listed on the SIX Swiss Exchange.

As with UBS’s previously issued bail-inable (TLAC) notes, the Notes contain contractual mechanics to (i) bring the Notes into the jurisdiction of the resolution powers of FINMA should restructuring proceedings be opened with respect to UBS Group AG, so that FINMA may exercise its statutory resolution powers to write-down the Notes and / or convert them into equity of UBS Group AG (i.e., an automatic issuer substitution feature), and (ii) safeguard the recognition of the exercise of such resolution powers by FINMA.

Structural subordination enables FINMA to fully or partially convert or write-down the Notes prior to the operating liabilities of the bank UBS AG. In view of the issuance of the Notes by a Swiss SPV, the Issuer has been declared a “relevant group company” pursuant to art. 2bis of the Swiss Banking Act. This means that FINMA will be able to exercise its statutory resolution powers with respect to the Issuer as well as UBS Group AG, allowing FINMA to take a comprehensive approach in a resolution scenario.

Homburger advised UBS in the structuring of the transaction and on all regulatory and transactional aspects as to Swiss law of the offer, the issuance and listing of the Notes.

The Homburger team included partners Benedikt Maurenbrecher, Stefan Kramer (both Banking and Finance / Capital Markets) and Stefan Oesterhelt (Tax) as well as counsel Lee Saladino and associate Andreas Josuran (both Banking and Finance / Capital Markets).