Financed by UBS, BlackRock purchases UBS portfolio

Private equity firms and hedge funds are making some massive bets on distressed debts. The terms have been pretty good of late, though the leveraged loan market has rallied. The latest news, as noted by the Financial Times, is that UBS has closed on a deal to sell a portfolio of primarily Alt-A and subprime loans to a new fund managed by BlackRock. It sold securities with a nominal value of $22 billion for just $15 billion. But the real twist, the article notes, is that UBS provided the majority of financing for BlackRock via a collateralized term loan of approximately $11.25 billion. So as long as the securities don't absolutely crater, this looks to be a win-win.  

For more:
- here's the article
- here's a AP article

Related Articles:
BlackRock's Fink stays in the news
UBS in hot seat with big bet