UBS Taps Bond Insurer for Private Debt Securitization

UBS Group AG is packaging its stakes in eight private credit funds into debt that’s backed by an insurance company, a financial maneuver that would allow the bank to cash out of the positions without having to unload them directly.

The Swiss bank’s money-management arm, Unified Global Alternatives, plans to sell $500 million of the securities after taking the relatively unusual step of hiring an insurer to guarantee $375 million of them against default, according to people with knowledge of the transaction, declining to be identified discussing confidential information. UBS is targeting an investment-grade rating of A2 from Moody’s Ratings on that portion of the deal, the people said.