By Angela McDaniels
Tacoma, Wash., Sept. 18 - UBS AG, London Branch priced $10 million of ETracs Diversified High Income exchange-traded notes due Sept. 18, 2043 linked to the NYSE Diversified High Income index, according to a 424B2 filing with the Securities and Exchange Commission.
The notes have a face amount of $25 each.
The company plans to sell up to $25 million of the notes. The remaining $15 million will be sold from time to time at varying prices.
The notes pay a monthly coupon equal to the sum of the net cash dividends or distributions that a hypothetical holder of the index constituents would have been entitled to receive during the month minus an accrued tracking fee of 0.84% per year.
The notes are putable, subject to a minimum of 50,000 notes and a redemption fee of 0.125%. They are callable in whole beginning Sept. 23, 2014.
The payout at maturity or upon redemption will be par plus the index return, which could be positive or negative, plus the final coupon minus the accrued tracking fee.
In the case of a redemption, the final index level will be the average of the index's closing levels on the five business days ending on the business day following the redemption notice date. For calculating the payout at maturity, the final index level will be the average of the index's closing levels on the five business days beginning Sept. 9, 2043.
The notes have been approved for listing on NYSE Arca under the symbol "DVHI."
The index was launched on Aug. 20. It measures the performance of 138 securities that historically have paid high dividends or distributions. Its features and construction seek to highlight yield, and the diversity of the index constituent sectors seeks to minimize volatility.
As of Sept. 13, the five largest index constituents were the PowerShares Emerging Markets Sovereign Debt exchange-traded fund (9.97% weight), the iShares iBoxx $ High Yield Corporate Bond ETF (9.93% weight), the iShares US Preferred Stock ETF (7.04% weight), the Market Vectors High Yield Municipal Index ETF (4.94% weight) and Ares Capital Corp. (4.15% weight).
UBS Investment Bank is the agent.
| Issuer: | UBS AG, London Branch
|
| Issue: | ETracs Diversified High Income exchange-traded notes
|
| Underlying index: NYSE Diversified High Income index
|
| Amount: | $10 million
|
| Maturity: | Sept. 18, 2043
|
| Coupon: | Amount equal to net cash dividends or distributions made by index constituents during month minus tracking fee of 0.84% per year; payable monthly
|
| Face amount: | $25
|
| Payout at maturity: | Par plus index return plus final coupon minus accrued tracking fee
|
| Call option: | In whole from Sept. 23, 2014 onward
|
| Put option: | At any time, subject to minimum of 50,000 notes and 0.125% redemption fee
|
| Initial index level: 998.1443
|
| Pricing date: | Sept. 18
|
| Settlement date: | Sept. 23
|
| Agent: | UBS Investment Bank
|
| Fees: | Varies
|
| Listing: | NYSE Arca: DVHI
|
| Cusip: | 90267L805
|
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