Deutsche Bank & UBS Write Downs, Panhandling For Billions Again

Today, Deutsche Bank, Germany's largest bank,

unveiled a $3.9 billion writedown related to its subprime holdings, saying conditions have worsened.

In Q4 UBS, Europes largest bank, posted a $12.5 billion loss, the biggest ever by a bank. Today...

UBS unveiled an additional $19 billion writedown to double its losses to $33 billion on the value of toxic assets

and became the hardest hit bank from the U.S. subprime crisis and subsequent credit crunch.

It also parted company with its CEO Marcel Ospel and said it will hive off ailing businesses into a separate unit.

S&P cut UBS's long-term counterparty credit rating by one level to AA- and said it may lower the rating further.

Matthew Hegarty, a credit analyst at Barclays Capital: "We expect further writedowns from banks.

As we move through the default cycle, we would expect to see mark-to- market writedowns replaced by credit impairments,

although that is likely to start to happen toward the end of the year rather than this quarter
."

The Nattering One muses... and this is good news?

UBS is seeking to panhandle another $15 billion through a rights issue in a SECOND emergency attempt to shore up its balance sheet. Why?

Year end UBS's holdings of subprime assets $15 billion; Alt A $16 billion; Auction rate securities $11 billion.

Given the above state of affairs, compare today's $19 billion writedown to the shareholders equity of $42.5 billion at the close of 2007. Get the picture?

Worse yet... raising capital AGAIN will mean UBS has to renegotiate the terms of the $13 billion bond it sold

to Government of Singapore Investment Corp and an unidentified Middle Eastern investor last month (Oman). Hattip to Bloomberg.

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