UBS takes wraps off rights issue

Swiss banking group UBS has revealed the terms of its $16 billion rights issue, the Times reports.

The enormous shareholder sale is one of the largest in history - and has come about due to the heavy losses the bank has sustained in the credit crunch.

UBS has already announced around $37 billion of securities write-downs and other losses, a figure which might increase still further as positions are unwound.

Accordingly, the rights issue is to offer shareholders a 30 per cent discount on the new stock.

At the bank's annual general meeting last month, bosses were given the go-ahead to improve its capital ratios - effectively approving the shareholder sale.

UBS has also already sold off $15 billion of investment risks to BlackRock in another bid to balance the books.

Shares in the bank declined four per cent yesterday due to speculation over the rights issue.