On August 27, 2019, UBS Group AG (the Issuer) successfully completed the issuance of AUD 700 m 4.375 per cent. Tier 1 Capital Notes (the Notes). The Notes are "high trigger" regulatory capital instruments that are eligible to fulfill UBS Group AG's Swiss going concern requirements.
The Notes feature a full contractual write-down if (among other events) UBS Group AG's consolidated common equity tier 1 capital falls below 7 per cent. of its consolidated risk weighted assets (a so-called "Trigger Event"). This means that, in the case of the occurrence of a Trigger Event, the Notes will be fully written-down prior to, or at the latest concurrently with, UBS Group AG's other outstanding (high-trigger and low-trigger) regulatory capital write-down instruments. Since the Notes are eligible to fulfill Swiss going concern requirements, they also qualify for an exemption from the Swiss withholding tax that would normally be applicable to bonds directly issued by the Swiss-domiciled Issuer. The Notes are traded on the SIX Swiss Exchange.
Homburger advised UBS with respect to all regulatory and transactional aspects of Swiss law. The Homburger team included partners Benedikt Maurenbrecher, Stefan Kramer (both Banking and Finance | Capital Markets) and Stefan Oesterhelt (Tax), as well as counsels Lee Saladino and Eduard De Zordi and associate Olivier Baum (all Banking and Finance | Capital Markets).