UBS, the European banking group hard hit by the sub-prime crisis in the United States, has halved its exposure to the toxic American mortgage market by offloading $22 billion (£11.25 billion) of securities to BlackRock, the US money manager.

Central to the deal’s success was an $11.25 billion loan by UBS to BlackRock, which financed more than three quarters of the $15 billion purchase price.

Switzerland’s largest bank, which has written down $37 billion as a result of the collapse in US mortgage values, has already taken a hit of $7 billion on the value of the securities, mostly consisting of sub-prime US mortgage assets.

The deal means that UBS receives 68 cents on the dollar against the value of the securities. It led to speculation last night that UBS was set to unveil details of a deeply discounted rights issue worth SwFr15 billion (£7.3 billion), having secured approval from shareholders last month. Two sovereign wealth funds have already taken out big investments in the bank.

BlackRock is one of the world’s biggest asset managers, with funds under management of almost $1.4 trillion. Founded by Larry Fink, the Wall Street investment veteran who remains its chairman and chief executive, BlackRock has a history of taking on troubled investments. In March, it was asked by the US Federal Reserve to run a $29 billion portfolio previously managed by Bear Stearns, the troubled securities firm now owned by JPMorgan.

Merrill Lynch, which previously held merger talks with BlackRock, continues to own a stake.

Selling off the securities reduces UBS’s US mortgage exposure to about $17 billion. The bank still owns a further $25.4 billion of US property and student loans and other securities.

As well as securities backed by sub-prime mortgages, BlackRock’s portfolio contains Alt-A securities, which are just above sub-prime in quality.

BlackRock paid the remaining $3.75 billion of the sale price after raising fresh equity from its investors.

The Swiss bank has been the hardest hit of all Europe’s banks as a result of its exposure to American homeowners with patchy credit histories or repayment problems. It has cut its exposure to sub-prime “toxic” securities by 60 per cent in the past year. It is understood that if the value of the fund improves beyond an agreed hurdle, UBS will claim a share of future profits.

Since going into an annual loss last year, UBS has overhauled its executive team and installed Marcel Rohner as chairman and chief executive. It has radically tightened its risk management processes.

This month UBS reported a further loss for the first quarter and said that it was cutting 5,500 jobs.

About 2,600 jobs will go in UBS’s investment bank, blamed for most of the writedowns. A further 2,900 jobs will go in other parts of the business.

There has been speculation that the bank, which operates the world’s largest wealth manager, is vulnerable to a bid in the light of its problems.

Barclays, the UK’s third-largest bank, has been tipped as a potential bidder.

UBS shares fell by more than 3.6 per cent to SwFr30.58.

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