UBS Takes Huge B&C Writedown

UBS AG, once a major warehouse lender to the subprime industry, said it will take a $19 billion writedown on its mortgage-related investments in the first quarter, including charges against its structured finance positions.

Just 18 months ago UBS was the largest warehouse lender to subprime non-depositories in the U.S. with almost $22 billion. It did not own a subprime mortgage originator but purchased the servicing unit of now-defunct subprime People's Choice Home Loans, Irvine, Calif. and invested in B&C related CDOs. In January, UBS took a $10 billion writedown on its U.S. positions, or $30 billion in subprime-related charges. UBS is forming a new unit "to hold certain currently illiquid U.S. real estate assets" and plans to raise $15 billion. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/