(Bloomberg) -- UBS Group AG and the Swiss government haven’t reached consensus on the precise terms of a state guarantee, which may delay the close of its takeover of Credit Suisse Group AG, according to people familiar with the matter.

The lack of final terms over the 9 billion Swiss-franc ($9.9 billion) backstop for losses that UBS could incur is one holdup that could push completion further into June than previously expected, said the people, who asked not to be named as the details aren’t public. UBS and the government are also still haggling over the regulatory implications of the acquisition, including higher capital requirements and liquidity rules.

While executives had guided that the deal could close around the end of May and some senior bankers had been told to prepare for around June 7, that later date is now also at risk, the people said. Uncertainty over the $3 billion takeover, which was brokered by the government in March to prevent a total collapse of Credit Suisse, hangs over the thousands of employees whose jobs are likely to be affected by the fusion. 

A spokeswoman for the Swiss finance ministry said that negotiations are continuing, and there’s no deadline for the conclusion of the contract. UBS declined to comment on the talks. 

Earlier this week UBS detailed the outstanding areas of negotiation with the government, including the loss backstops, the regulatory implications and the future of the Swiss domestic bank, in a filing with the US Securities and Exchange Commission. 

UBS said it expects that the principal terms of the so-called Loss Protection Agreement will be set before the closing of the acquisition, but not the regulatory implications. UBS and the regulators are still determining what adjustments to liquidity and capital requirements and risk weighted asset measures the combined entity will need to make.

The talks with the government are running in parallel to international regulators’ own processes to approve the deal. On Thursday, the European Union said the fusion doesn’t raise any competition concerns in the bloc, removing one potential hurdle to completion. 

The Swiss government’s loss-guarantee was necessary because there was little time to do due diligence and Credit Suisse has hard-to-value assets on its books that UBS plans to wind down, the government has said. If that results in losses, UBS would assume the first 5 billion francs and the federal government the next 9 billion francs. The parties are also discussing what would happen in the case that losses exceeded that initial 14 billion francs. 

A key part of the deal, the wipe-out of some $17 billion of junior Credit Suisse debt known as AT1s, is also being challenged in the Swiss courts. Any substantial challenge to that arrangement could materially change the terms of the takeover for UBS. 

On May 17 UBS said it saw mark-downs of about $13 billion on Credit Suisse assets and also estimated that legal liabilities may cost as much as $4 billion over 12 months. The figures are likely to change as further analysis is performed, the bank said in a regulatory filing.

Credit Suisse warned in April that the limbo period had “already increased our employee attrition” and delays in the completion of the transaction could have “a material adverse effect on our business.”

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