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UBS Group and Credit Suisse logos in a photo illustration. /CFP
S&P Global Ratings downgraded UBS Group's credit outlook to negative on Monday following the company's acquisition of Credit Suisse.
The rating agency sees major execution risks in UBS Group integrating its former rival's investment banking activities.
Separately, Moody's affirmed the ratings of UBS Group on Tuesday, and changed the outlooks on its long-term deposit and senior unsecured ratings from stable to negative.
In a state-backed takeover deal on Sunday, it was announced that UBS Group would buy Credit Suisse, Switzerland's second-largest bank, for $3.25 billion.
Under the deal, Swiss regulators decided that Credit Suisse's Additional Tier 1 bonds – or AT1 bonds – with a notional value of $17 billion will be valued at zero, angering some of the holders of the debt who thought they would be better protected than shareholders.
The rescue has caused turmoil in European markets, with banks' bond prices under pressure as investors focus on the potential risks of holding AT1 bonds.
European regulators said on Monday that they would continue to impose losses on shareholders before bondholders in a bid to calm investor nerves following the fallout of the AT1 decision in Switzerland.
(With input from Reuters)
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