Homburger advised UBS Group AG on its debut issuance of USD 3.5 bn AT1 Notes with an equity conversion feature

On November 13, 2023, UBS Group AG successfully completed its offering of an aggregate of USD 3.5 bn of AT1 Notes. The offering comprised two tranches: USD 1.75 bn of 9.250 per cent. AT1 Notes, which are redeemable at the option of UBS Group AG after five years, and USD 1.75 bn of 9.250 per cent. AT1 Notes, which are redeemable at the option of UBS Group AG after ten years.

The Notes are «high trigger» regulatory capital instruments that are eligible to fulfill UBS Group AG’s Swiss going concern requirements and constitute UBS Group AG’s first issuance of AT1 capital instruments since the acquisition of the Credit Suisse group in March 2023.

The Notes also constitute UBS Group AG’s first ever issuance of regulatory capital instruments with an equity conversion feature. While the Notes are initially subject to write-down in accordance with their terms upon occurrence of a «Trigger Event» or a «Viability Event», the terms of the Notes provide that, following approval of a minimum amount of conversion capital by UBS Group AG’s shareholders, upon occurrence of a such an event, the Notes will be converted into ordinary shares of UBS Group AG in accordance with their terms rather than be subject to write-down.

The Notes are governed by Swiss law and have been provisionally admitted to trading, and application has been made for definitive admission to trading and listing of the Notes, on the SIX Swiss Exchange.

Homburger advised UBS with respect to all regulatory, transactional and tax aspects of Swiss law. The Homburger team was led by Benedikt Maurenbrecher and Stefan Kramer, and included Lee Saladino, Daniel Hulmann and Yulia Shaburnykova (all Capital Markets), as well as Dieter Gericke, Claude Lambert, Micha Fankhauser and Aron Belegu (all Corporate / M&A) and Stefan Oesterhelt (Tax).