Swiss bank UBS has sold loans - with a nominal value of about $22bn - to fund management group Blackrock for $15bn.

- 21 / 05 / 2008 18:47

UBS said that the move was "risk reduction" which was "a critical part" of its ongoing financial restructuring after its exposure to sub-prime loans.

The deal represents a $7bn loss for UBS on the assets it had accumulated.

BBC business editor Robert Peston said the deal may have implications for the way losses on assets linked to the US housing market were calculated.

UBS is also lending Blackrock $11.25bn to help it finance the deal.

The assets being sold include sub-prime, prime mortgage-backed securities and Alt-A (a grade of US mortgage debt that is just a bit better than sub-prime).

Reuters