By Adria Calatayud


UBS Group and Apollo Global Management agreed to take the final step in the carveout of Credit Suisse's former securitized products business, as the banking giant presses ahead on the integration of its once rival.

The Swiss bank said Wednesday that it and New York-based asset manager Apollo agreed to end deals for the management of Atlas SP, the former securitized products business of Credit Suisse that Apollo acquired shortly before Credit Suisse's takeover by UBS.

The move is part of UBS's efforts to integrate Credit Suisse, a year after the deal engineered by Swiss authorities to rescue its former crosstown rival.

As part of the agreement, Atlas concluded its transition-services agreement with UBS and UBS will close out its investment-management agreement with Atlas. Apollo will also buy $8 billion of senior secured financing facilities from UBS, the bank said.

UBS said this will allow it to accelerate its plans to unwind and simplify its noncore and legacy portfolio and marks Atlas's evolution into a fully independent platform.

The deal will reduce costs and complexity for UBS while freeing up capital from noncore operations, UBS Chief Executive Sergio Ermotti said.

The bank expects to book a net gain in the first quarter of around $300 million at the group level from the conclusion of these agreements and the assignment of the financing lines to Apollo, while its Credit Suisse AG business is expected to recognize a net loss of about $900 million.

The difference reflects adjustments UBS made and provisions it booked last year that aren't recognized under Credit Suisse's accounting policies, UBS said.

Apollo said the transaction is economically neutral for the group and strategically positive for Atlas.

"This caps off a quarter marked by record origination and capital raising for Atlas, where we have generated $24 billion originations since inception and have secured capital to support over $40 billion of client assets," Apollo Chief Executive Marc Rowan said.


Write to Adria Calatayud at adria.calatayud@wsj.com


(END) Dow Jones Newswires

03-27-24 0315ET