UBS rights issue hits an air pocket


The Telegraph reported that UBS, the giant Swiss Bank, had its shares suspended twice yesterday as it tried to mount a share rights issue while its shares plummeted to a 52-week low. UBS is trying to raise 16 billion Swiss Francs (about $16 billion) to shore up its balance sheet after the Swiss banking regulators decided to increase stringency on capital requirements and after recording nearly $40 billion in writedowns in the global credit crunch.

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Apparently, the Lehman issue is giving investors more pause about all of these capital raising exercises by global financial institutions. Better to get your capital raising over and done with now. At some point, the investors have to say enough is enough. And one doesn’t want to be caught out in this game of musical chairs.

UBS takes hit from investor pessimism, Telegraph, 10 Jun 2008

See also: RBS couldn’t raise the money

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