UBS/SWFs: Weak net

Sovereign fund investors in UBS will be kicking themselves. When Singapore’s GIC and an unnamed Middle-Eastern fund agreeed to buy SFr13bn of mandatory convertibles in the Swiss bank in December they prudently negotiated a safety net - a lower conversion price in case of a new mega-issue. Sadly, it turns out, the net wasn’t quite strong enough. UBS’ moves to raise a further SFr15bn in fresh capital are enough for the sovereign funds to extract a better deal. Yet while the terms of the original ...