By Tuba Sahin
ANKARA (AA) — Credit rating agency Moody's downgraded its outlook for Swiss banking giant UBS to negative from stable on Tuesday following its takeover of troubled rival Credit Suisse.
"The outlooks on the long term deposit and senior unsecured ratings were changed to negative from stable," it said in a statement.
Moody's affirmed the A3 senior unsecured debt and Baa3 Additional Tier 1 ratings of UBS Group AG.
UBS announced its intentions to acquire Credit Suisse for 3 billion Swiss francs ($3.25 billion) late on Sunday, while the Swiss government guaranteed to assume losses up to 9 billion francs from assets.
"The action balances on the one hand the advantageous financial terms in terms of liquidity and capital together with the long-term potential for franchise enhancement, and on the other hand the complexity, extent and duration of the integration," Moody's said.
The deal is targeted to cut the operating costs of UBS Group by more than $8 billion and boost the banking giant's franchise in wealth management, Swiss banking, asset management, and, to a lesser degree, investment banking, Moody's added.