Unable to find a buyer for its U.S. municipal bonds business, UBS said it will close down the unit and fire 280 people, according to media reports.

The Swiss bank said May 6 it would either sell or close its municipal department, which employed more than 300 people and ranked third in U.S. muni debt underwriting in the first quarter.

In a statement cited by Bloomberg News, UBS said "the complexities of selling the business in the current market and limited market capacity for a business of this size" made a sale "unlikely in the near term.''

UBS will fire about 280 people, spokesman Doug Morris told Bloomberg.

Another UBS source told Reuters that about 70 of the department's employees will transfer to a separate muni-bond trading operation within UBS Wealth Management, while the remaining employees will be laid off.

The Bond Buyer newspaper, which reported the bank's decision before it was announced, said several regional firms are hiring in the municipal area. They include Depfa First Albany Securities, Morgan Keegan, Wachovia, Raymond James and Piper Jaffray. Minority-owned firms also are said to be on the lookout for talent.