Marketplace has a new podcast for kids, "Million Bazillion!" EPISODE OUT NOW

UBS sells mortgages to American firm

Stephen Beard May 6, 2008
HTML EMBED:
COPY

UBS sells mortgages to American firm

Stephen Beard May 6, 2008
HTML EMBED:
COPY

TEXT OF STORY

Renita Jablonski: The Swiss bank UBS is selling some of its subprime mortgages to American investment firm BlackRock. The multi-billion dollar deal has been hailed as a sign the credit crisis my be easing. From London, Stephen Beard reports.


Stephen Beard: BlackRock is paying UBS $15 billion for the package of subprime mortgages. That’s a hefty 25 percent discount to the face value. UBS therefore is taking a $5 billion hit. Nevertheless, the deal will be a big relief. Switzerland’s largest bank has been hammered by the credit crunch. So far it’s written off over $37 billion. Today’s deal with BlackRock offers a glimmer of hope — the worst may be over. Haig Simonian of the Financial Times says mortgage-backed securities are now beginning to sell.

Haig Simonian: Life is returning to the markets and at least some purchasers are emerging from the woodwork and some people who want to sell are obtaining now marginally better than firesale prices.

But UBS continues to suffer. The bank today unveiled another $11 billion loss for the first quarter and said that a further 5,500 jobs will go.

In London, this is Stephen Beard for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.