05:56 AM EDT, 08/04/2025 (MT Newswires) -- UBS Group ( UBS ) is considering a synthetic risk transfer deal involving about 2 billion Swiss francs ($2.47 billion) in loans, Bloomberg reported Monday, citing unnamed people familiar with the matter.

According to the report, the move aims to help the bank manage higher capital requirements proposed by the Swiss government.

The potential synthetic risk transfer could cover around 3% of the reference loan portfolio and is still in early development, with size and terms subject to change, the report said.

Synthetic Risk Transfers allow banks to transfer credit risk by issuing credit-linked notes to investors, such as pension and sovereign wealth funds, freeing capital otherwise required for regulatory purposes, Bloomberg said, adding that typically, default protection covers 5% to 15% of loan values.

The transaction may be issued through J-Elvetia, a vehicle Credit Suisse used for such a transaction before UBS acquired the bank, the report said. UBS inherited several Credit Suisse legal issues during integration, including a mortgage-related case that resulted in a $300 million settlement announced on Monday.

UBS didn't immediately reply to MT Newswires' request for comment.

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