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Facing $5 Billion in Paper Loss, GIC Converts UBS Notes

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Singapore’s sovereign wealth fund converted its UBS notes into ordinary shares, getting hit with a paper loss of approximately US$ 5 billion. The Government of Singapore Investment Corporation allocated 11 billion CHF (US$ 10.22 billion) in mandatory convertible notes in UBS AG. The investment was used to support the Swiss financial giant during the global financial crisis.

The GIC is facing significant reputational risk among its peers and the Singapore public.

The GIC believed in the franchise value of UBS. GIC officials are hoping its investments in these global financial institutions play out. The GIC is facing significant reputational risk among its peers and the Singapore public.

A filing through the SEC in April displayed the original conversion price would be 47.7 CHF, two-thirds more than UBS’s last share price of 15.86 CHF. Singapore’s GIC earned nearly 2 billion CHF from a 9% coupon over the last 2 years. This partially compensated the sovereign wealth fund for the deep dive of the share price of UBS.

GIC had earned about 2 billion francs from a 9 percent coupon over the last two years, which partially compensated for the sharp erosion in UBS’ share price.

Grant & Eisenhofer Reveals Fortis Investors to Receive $1.5 Billion in Mega Settlement

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Law firm Grant & Eisenhofer won a landmark case for its clients after a seven-year legal duel in Dutch courts. On July 13, 2018, the Amsterdam Court of Appeals officially approved the largest securities settlement ever reached in Europe, paving a path for international insurance company Ageas N.V./S.A. to begin payment of US$ 1.5 billion (€1.3 billion) to multiple groups of institutional and individual investors from Europe and the United States. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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State Street to Buy Charles River Systems

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State Street Corporation inked a deal to acquire Charles River Systems, Inc. (Charles River Development), a provider of investment management front office tools and solutions. Under the terms of the agreement, State Street will purchase Burlington, Massachusetts-based Charles River Development in an all-cash transaction for US$ 2.6 billion. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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FINMA Announces Rothschild Bank Broke Anti-Money Laundering Rules over 1MDB Fiasco

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The Rothschild Bank AG and one of its units called Rothschild Trust (Schweiz) AG got slapped with serious violations of anti-money laundering in regard to the 1MDB scandal. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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