Now raising intellectual capital
After the debacle of UBS’s American tax row, Berne can chalk up a small victory.
That deal effectively blows a hole in the country’s vaunted bank secrecy, whatever the official bluster. However, the government can be proud of being the first European government to sell the equity stake it took to support its banking sector during the crisis.
Moreover, it is set to make a 20 percent-plus return on the deal. UBS was in deep water last October when the Swiss government said that it would invest 6 billion Swiss francs in convertibles, and now things are less fraught, it’s taking its profit. It will collect 1.8 billion Swiss francs, representing the present value of the 12.5 percent coupon that would have been paid before the notes expired in 2011.
The shares rose 3.6 percent in early trading, suggesting that the government will not have to take a big discount on its sale. Even assuming that the 332 million shares it will receive were sold at a 5 percent discount, it will raise 5.5 billion Swiss francs on the sale alone.