Fitch Ratings’ recent action to place the Long-Term Issuer Default Ratings (IDRs) of UBS Group AG and its subsidiaries (UBS) on Rating Watch Negative and place the Long-Term IDRs of Credit Suisse Group AG and its subsidiaries (Credit Suisse) on Rating Watch Evolving is expected to have little impact on Fitch’s structured finance ratings.
 
Fitch’s global structured finance portfolio has limited rating exposure to UBS and Credit Suisse as transaction counterparties, with most transactions containing structural features that mitigate counterparty risk. Fitch is currently reviewing the relatively small number of exposed structured finance transactions for potential rating implications and expects to complete rating reviews in the next few days.
 
Fewer than ten Fitch-rated structured finance transactions globally have a direct rating dependency on Credit Suisse or UBS. An additional several dozen transactions globally rely on Credit Suisse and UBS in various operational support roles, most commonly as a derivative provider. The majority of derivative exposures are with Credit Suisse International, and it is unclear at this stage how the announced merger will affect this subsidiary. Transaction documents may require Credit Suisse or UBS to post collateral to satisfy eligibility requirements or may require a counterparty replacement if there were to be negative rating action on Credit Suisse’s or UBS’s Long-Term or Short-Term IDRs.
 
Credit Suisse’s and UBS’s role in the placement of hundreds of additional structured finance transactions as underwriter, arranger or structurer does not expose the structured finance ratings to ongoing counterparty risk, and there are no rating implications for these structured finance transactions.