UBS sees agreement on Credit Suisse loss guarantee by June 7 - SEC filing

ZURICH (Reuters) -UBS expects to finalize its agreement with the Swiss government to cover up to 9 billion Swiss francs ($9.92 billion) in losses from its emergency takeover of Credit Suisse by June 7, the Swiss bank said in a regulatory filing published on Tuesday.

Under the terms of the takeover orchestrated by Swiss authorities in March, UBS committed to cover the first 5 billion francs in potential losses while the government agreed to shoulder up to 9 billion francs on top of that.

"UBS Group AG expects that the Loss Protection Agreement will be finalized by June 7, 2023," a filing with the U.S. Securities and Exchange Commission said.

"Any further loss guarantee exceeding CHF 14 billion, which was not included as part of the Special Ordinance, requires a separate legal basis in the form of a parliamentary approval in the ordinary legislative procedure as well as the commitment credit," the SEC filling said.

The government agreement is one of the final hurdles UBS needs to clear before it can officially close the acquisition of its smaller rival.

The SEC document, which was dated June 5, reiterated that the UBS expected to complete the deal in the second quarter of 2023. The bank said on Monday it expected to seal the takeover as early as June 12.

The filing also said that UBS was engaged in discussions with Switzerland's financial regulator, FINMA, on the capital and liquidity requirements for the combined bank.

"We can confirm that the higher “too big to fail” capital requirements due to the progressive component will fully apply to UBS after an appropriate transitional period," FINMA said in an emailed response to a Reuters query.

It said higher capital requirements would be phased in from the end of 2025 and be completed by the start of 2030 at the latest.

($1 = 0.9075 Swiss francs)

(Reporting by Noele Illien, editing by John Revill and Tomasz Janowski)