UBS AG said Tuesday that it wrote down $19 billion on debt securities in the first quarter, as the bank continues to reel from exposure to the mortgage markets. Switzerland's largest bank has now written off a total of nearly $40 billion since the third quarter of 2007, thanks largely to subprime and Alt-A mortgages in the U.S. -- a loss in value that led to the abrupt resignation of chairman Marcel Ospel on Tuesday, as well. Ospel's depature comes after UBS said that it lost $11.9 billion during the quarter, and that it would seek $14.8 billion in new capital in an effort to bolster its balance sheet. He will be replaced by general counsel Peter Kurer, the company said in a press statement. UBS also said that amid still-mounting losses, it will seek the equivalent of $14.8 billion in a rights offer to replenish capital; that comes on top 13 billion Swiss francs already raised from investors in Singapore and the Middle East late last year. Whither thou, Alt-A? UBS was rumored to have unloaded as much as $24 billion in Alt-A-backed securities in late February and early March, helping fuel the latest round of credit crisis in U.S. financial markets. While it did not provide details on its write-down amount, the bank did say that the $19 billion write-down for the quarter was the result of "asset disposals" as well as the effects of further mark-to-market activity for its holdings. Over the first quarter, UBS's exposure to US residential sub-prime mortgage related positions declined to approximately $15 billion, from a previous $27.6 billion; its exposure to Alt-A positions was reduced from $26.6 billion to approximately $16 billion, it said. The sharp drop in Alt-A exposure is telling, if we assume that the full $12.6 billion in subprime exposure reduction was mostly due to mark-to-market activity -- which seems reasonable, since nobody's been able to sell the stuff. No other i-bank, so far, has been writing off Alt-A at anything close to the 40 percent clip UBS just disclosed. That seems prime to change during this first quarter earnings season, industry experts that spoke with Housing Wire said. "Not to say subprime won't matter, but we'll start seeing plenty of Alt-A writedowns this quarter," said one source, who asked not to be named. A new distressed asset unit UBS also said that it will form a separate distressed-asset management unit to manage most of its assets related to U.S. residential real estate, as part of an effort to isolate the portfolio from the rest of the company's businesses. The company said the entity would only "initially" be owned and financed by UBS, potentially signaling an intention to shop the distressed portfolio business to any number of hedge funds and related investors now looking to buy troubled mortgages and the securities backed by them. "UBS's intention is to reduce its exposure in a way that reduces the effect of distressed market conditions on the core businesses while providing the greatest opportunity for shareholders to realize value over time," the company said. For more information, visit http://www.ubs.com.