The buyback program applies to funds solely managed by UBS, and offers would be at net-asset value or below, Karina Byrne, a spokeswoman for Switzerland’s largest bank, said yesterday in an e-mailed statement. The Zurich-based firm has told advisers to contact clients who hold Puerto Rico closed-end funds and those with UBS Bank USA loans secured “in any part” by closed-end funds about the repurchase program, Byrne said.
The closed-end funds are capped to prevent the repurchase of more than 25 percent of outstanding shares over the life of the investment, Byrne said. Some funds are closer to that limit than others and may choose not to reach it with this buyback, she said.
Debt sold by Puerto Rico and its localities lost 16 percent this year through Nov. 22, the worst performance since at least 1999, Standard & Poor’s data show. Yields on Puerto Rico securities soared to record levels this year on concern that the island’s finances would deteriorate as its economy has struggled to grow since 2006.
Shares of the Puerto Rico Fixed Income Fund, one of the bank’s closed-end offerings, had a net asset value of $3.65 as of Nov. 20, according to UBS’s website. They were offered to the public at $10 each, according to a July 2003 prospectus.
UBS’s decision to repurchase shares was reported yesterday by InvestmentNews.com.
The lender said in October it put a financial adviser on administrative leave in Puerto Rico while it reviews loans issued to clients.
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