Exclusive-UBS Seeks About $6 Billion in Government Guarantees for Credit Suisse Deal – Source By Reuters

© Reuters. PHOTO: Headquarters of Swiss banks UBS and Credit Suisse at the Paradeplatz in Zurich, Switzerland on March 16, 2023. REUTERS/Denis Balibouse

Oliver Heart and Stefania Spezzati

(Reuters) – UBS Group AG (SIX:) is seeking government guarantees worth about $6 billion for a potential takeover of Credit Suisse Group AG, a person familiar with the talks told Reuters on Saturday.

Negotiations are still ongoing and the figure could change as several scenarios are still under consideration, the source said.

The guarantees will cover the cost of winding down parts of Credit Suisse and possible legal fees, the source said. A second person confirmed this without specifying the $6 billion figure.

Negotiations to resolve the crisis of confidence in Credit Suisse are facing major hurdles, the first source said, and 10,000 jobs may have to be cut if the two banks merge.

Swiss regulators are rushing to present a decision to Credit Suisse before markets reopen on Monday, but the difficulty of bringing the two giants together raises the possibility that talks will continue until Sunday, said a person who requested anonymity due to the sensitivity of the situation. situation. Credit Suisse, UBS and the Swiss government declined to comment.

Credit Suisse was valued at about $8 billion at Friday’s close.

According to the first source, Deutsche Bank AG (NYSE:) is also interested in acquiring a part of Credit Suisse. However, any deal with the German lender could take longer, the source said.

A spokesman for Deutsche Bank (ETR:) declined to comment.

Bloomberg previously reported on the German lender’s interest in parts of Credit Suisse.

“Any potential deal will come with complexities, one of which is protection from litigation, with the situation remaining fluid but with the clarity needed until Monday,” Thomas Hallett, an analyst at KBW, said in a note to clients on Saturday.