UBS credit fund writes down more holdings, Handelsblatt reports

UBS has informed clients that more assets in credit funds managed by its O’Connor unit had to be written off, as the crisis over short-term debt held by the unit deepens, German newspaper Handelsblatt cited a letter to clients as saying.

The newspaper reported on Tuesday that the Swiss bank warned fund unit holders in the letter that the investment vehicles had incurred “several millions” in further losses that were not related to the collapse of First Brands Group, which had initially weighed on the funds.

Handelsblatt quoted from the letter as saying the unspecified investment position, which accounted for about 5 percent of the funds’ assets, had to be marked down by 91 percent.

UBS said in November it was winding down investment funds run by hedge fund unit O’Connor, with the majority of assets expected to be sold by year-end.

The bank did not immediately respond to a request for comment.

Handelsblatt quoted UBS as saying: “Our priority remains on all necessary measures to protect customer interests and achieve maximum repayment.”

Reuters