Singapore's GIC says subscribing to UBS rights issue
The Government of Singapore Investment Corp said on Friday it would subscribe to a rights issue from embattled Swiss bank UBS, which has written down more than 37 billion dollars after the subprime crisis.
By Agencies |
SINGAPORE: The Government of Singapore Investment Corp said on Friday it would subscribe to a rights issue from embattled Swiss bank UBS, which has written down more than 37 billion dollars after the subprime crisis.
"Yes, I can confirm it," GIC's head of communications, Jennifer Lewis, told AFP, declining to give the value of the investment.
"GIC currently owns a relatively small position in UBS common stock, approximately 0.4 percent. We will subscribe fully to the new shares for our holdings in the UBS common stock."
GIC announced in December that it would inject 11 billion Swiss francs ($10.6 billion) into UBS after the bank revealed multi-billion-dollar losses from US subprime, higher-risk, mortgage investments.
The crisis has wreaked havoc in financial markets and led to a credit squeeze that sparked fears for the global economy.
UBS has received another two billion Swiss francs from an unnamed Middle East investor.
GIC is a sovereign wealth fund, a form of government-created investment vehicle which has emerged as a potent force on global financial markets, prompting calls for greater transparency amid fears they could be used by governments for political rather than commercial ends.
GIC was formed in 1981, managing only a few billion dollars of the city-state's foreign reserves. Today it says it manages "well above" $100 billion, and analysts say the true figure could be 300 billion or more.
A report by Citigroup Global Markets in October listed GIC as among the world's largest sovereign wealth funds.
In January GIC said it would pump 6.88 billion US dollars into US banking giant Citigroup, another subprime victim.
"We regard our investments in UBS and Citicorp as long-term investments which will give us good returns when markets stabilise and economic conditions return to normal levels," GIC deputy chairman and executive director, Tony Tan, said in April.
Earlier that month, UBS revealed an additional $19 billion in writedowns, and said it was seeking to raise 15 billion Swiss francs through a rights issue.
That exercise began on May 27. UBS announced it would offer shareholders one subscription right for each existing share held. The exercise of 20 subscription rights would entitle the shareholder to buy seven new shares at 21 Swiss francs per share.
UBS is one of the banks worst-hit by the subprime crisis, but its chief executive Marcel Rohner told Swiss newspaper Le Temps late last month that the worst was behind them.
"There will certainly be plenty of things for banks to clear up over the next two years but as far as systemic risks are concerned, we've got over the hardest part," he said.
Analysts said earlier they would not be surprised if GIC provided another capital infusion for UBS.
"Yes, I can confirm it," GIC's head of communications, Jennifer Lewis, told AFP, declining to give the value of the investment.
"GIC currently owns a relatively small position in UBS common stock, approximately 0.4 percent. We will subscribe fully to the new shares for our holdings in the UBS common stock."
GIC announced in December that it would inject 11 billion Swiss francs ($10.6 billion) into UBS after the bank revealed multi-billion-dollar losses from US subprime, higher-risk, mortgage investments.
The crisis has wreaked havoc in financial markets and led to a credit squeeze that sparked fears for the global economy.
UBS has received another two billion Swiss francs from an unnamed Middle East investor.
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GIC is a sovereign wealth fund, a form of government-created investment vehicle which has emerged as a potent force on global financial markets, prompting calls for greater transparency amid fears they could be used by governments for political rather than commercial ends.
GIC was formed in 1981, managing only a few billion dollars of the city-state's foreign reserves. Today it says it manages "well above" $100 billion, and analysts say the true figure could be 300 billion or more.
A report by Citigroup Global Markets in October listed GIC as among the world's largest sovereign wealth funds.
In January GIC said it would pump 6.88 billion US dollars into US banking giant Citigroup, another subprime victim.
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"We regard our investments in UBS and Citicorp as long-term investments which will give us good returns when markets stabilise and economic conditions return to normal levels," GIC deputy chairman and executive director, Tony Tan, said in April.
Earlier that month, UBS revealed an additional $19 billion in writedowns, and said it was seeking to raise 15 billion Swiss francs through a rights issue.
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That exercise began on May 27. UBS announced it would offer shareholders one subscription right for each existing share held. The exercise of 20 subscription rights would entitle the shareholder to buy seven new shares at 21 Swiss francs per share.
UBS is one of the banks worst-hit by the subprime crisis, but its chief executive Marcel Rohner told Swiss newspaper Le Temps late last month that the worst was behind them.
"There will certainly be plenty of things for banks to clear up over the next two years but as far as systemic risks are concerned, we've got over the hardest part," he said.
Analysts said earlier they would not be surprised if GIC provided another capital infusion for UBS.
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