UBS to price barrier optimization securities linked to S&P 500

By Angela McDaniels

Tacoma, Wash., Jan. 6 - UBS AG plans to price 0% barrier optimization securities with partial protection due Jan. 25, 2010 linked to the S&P 500 index, according to an FWP filing with the Securities and Exchange Commission.

If the index closes above the index barrier on any day during the life of the notes, the payout at maturity will be par of $10 plus 3%. The index barrier is expected to be 137% to 142% of the initial index level and will be set at pricing.

Otherwise, the payout will be:

• Par plus the index return if the final index level is greater than the initial level;

• Par if the index declines by 25% or less; or

• Par minus 1% for every 1% that the index declines beyond 25%.

The securities are expected to price Jan. 15 and settle Jan. 21.

UBS Financial Services Inc. and UBS Investment Bank are the underwriters.

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