UBS AG Contemplates $4.5B Bond Offerings in U.S. - Analyst Blog


As per Bloomberg, the Swiss major UBS AG ( UBS ) is planning corporate bond offerings in the U.S. The bank will be issuing $4.5 billion worth of bonds.

UBS AG is planning to issue $2.5 billion worth of notes with a five-year maturity period. These notes will yield 0.8% more than the Treasury notes having same maturity. Further, the bank will likely sell three-year bonds worth $1.25 billion that would yield 0.6% more than the benchmark interest rates.

Additionally, UBS AG could be offering $500 million worth of floating rate notes that will yield 64 basis points (bps) more than the three-month London Interbank Offered Rate (LIBOR). Further, $250 million worth of three-year bonds yielding 38 bps higher than the standard rate could be on the offering as well.

Notably, if everything goes per the plan, the bond offerings would be the 13th largest offering this year, according to Bloomberg. Other firms including Pfizer Inc. ( PFE ), Amgen Inc. ( AMGN ), IBM Corp. ( IBM ), Monsanto Co. ( MON ), Verizon Communications Inc. ( VZ ) and Wells Fargo & Co. ( WFC ) had issued bonds worth similar amounts.

We believe that UBS'potential bond-issuance plans aim at enhancing its capital levels. Moreover, the bank could be utilizing the cash for any general corporate purpose as well.

Currently, UBS AG carries a Zacks Rank #5 (Strong Sell).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: UBS , IBM , PFE , MON , WFC

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