Twitter CEO Elon Musk has expressed his shock that investment banking company UBS would get a $100 billion emergency credit line as part of a $2 billion deal to buy rival Credit Suisse.
Taking to Twitter, Musk responded to a tweet linking to an article reporting on the deal between the two financial institutions which was announced on March 19.
“So UBS buys Credit Suisse, shareholders don’t get a vote, UBS gets $100 billion credit line from central bank…,” Twitter user Wall Street Silver posted alongside the link. “Crazy times this week. Band-aids flying everywhere to keep the system from falling apart.”
“$100 billion line…wow,” SpaceX founder and Tesla CEO Musk replied.
UBS announced its takeover of Credit Suisse—which is among 30 financial institutions known as globally systemically important banks—on Sunday.
The move hopes to stave off a collapse of the 167-year-old global investment bank as well as broader financial market chaos after shares of the Swiss lender plunged.
Deal Will ‘Protect Swiss Economy’
Under the deal, which was mediated by the Swiss federal government, UBS is buying Credit Suisse for around $3.23 billion. Credit Suisse shareholders will receive 1 UBS share for every 22.48 Credit Suisse shares held, equivalent to CHF 0.76 per share, which is substantially less than Credit Suisse’s closing price of CHF 1.86 on March 17.
“With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation,” the Swiss National Bank (SNB) said in a statement.
SNB said it will also provide more than 100 billion Swiss francs of liquidity to UBS in order to help facilitate a smooth deal.
“In addition, and based on the Federal Council’s Emergency Ordinance, Credit Suisse and UBS can obtain a liquidity assistance loan with privileged creditor status in bankruptcy for a total amount of up to CHF 100 billion ($108 billion),” SNB said.