UBS and Apollo have reached a deal whereby ATLAS SP (Atlas) will terminate its Investment Management Agreement with UBS and UBS will close its Transition Services Agreement with Atlas.

As part of this contract, Apollo will acquire $8bn in senior secured borrowing facilities from UBS.

This advantageous deal fits both Apollo’s ongoing momentum in developing Atlas as a stand-alone origination platform and UBS’s objective of streamlining and winding down its Non-Core and Legacy (NCL) portfolio.

By taking these steps, UBS will be able to expedite its plans to phase out and restructure its NCL portfolio while avoiding any customer disturbance and lowering the leverage ratio denominator and risk-weighted assets in NCL.

Following the completion of these arrangements and the assignment of the senior secured lending facilities, UBS Group anticipates incurring a net gain of approximately $300m in the first quarter of 2024, while Credit Suisse AG expects a net loss of approximately $900m.

The discrepancies are a result of regulations made by UBS Group in the second and third quarters of 2023 that were not recognised under Credit Suisse AG’s US GAAP accounting policies, in addition to adjustments made under IFRS as part of the purchase price allocation at the closing of the acquisition of Credit Suisse Group.

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With this alliance, Atlas and Apollo are moving toward making Atlas a completely autonomous platform with an emphasis on investment-grade asset-backed origination.

Sergio P. Ermotti, UBS Group CEO said: “We’re pleased with this mutual agreement with Apollo. As we execute on our integration plans, this is another example of our relentless focus on working with clients and counterparties to free up capital from Non-Core activities and reducing costs and complexity.”

Marc Rowan, CEO of Apollo added: “We are pleased to finalise the Atlas transition in partnership with UBS, in an economically neutral manner for our firm. This caps off a quarter marked by record origination and capital raising for Atlas, where we have generated $24bn originations since inception and have secured capital to support over $40bn of client assets.”