Bloomberg- UBS AG, which fell 3.8 percent in Swiss trading after Carlyle Group’s mortgage-bond fund moved a step closer to collapse, said it doesn’t give uncollateralized loans to hedge funds.
“All our trading and lending activity with hedge funds is collateralized,” UBS spokeswoman Tatjana Domke in Zurich said today. Assets held as collateral are “well diversified and liquid.”
All except three of the 60 members of the Bloomberg Europe Banks & Financial Services Index fell after Carlyle Capital Corp. said it failed to reach an agreement with lenders who demanded more than $400 million to meet margin calls. The fund said that it defaulted on about $16.6 billion of debt as of yesterday.
Domke declined to comment on whether UBS has any exposure to Carlyle, saying the bank doesn’t comment on individual client relationships.
UBS, Europe’s biggest bank by assets, dropped 1.22 francs to 30.72 francs, cutting the company’s market value to 63.7 billion francs ($63 billion). The Bloomberg Europe Banks & Financial Services Index lost 2.6 percent.
