By Angela McDaniels
Tacoma, Wash., Feb. 17 – UBS AG, London Branch sold $25 million of 0% exchange-traded access securities due Feb. 22, 2046 linked to the S&P GSCI Crude Oil Total Return index, according to a 424B2 filing with the Securities and Exchange Commission.
The issuer sold the $25 million principal amount of notes to underwriter UBS Securities LLC at par. It plans to sell up to $100 million of the notes in total. After the initial trade date, the issuer may sell a portion of the notes at varying prices from time to time.
The new Etracs are part of the issuer’s series B medium-term notes, which – unlike Etracs issued prior to June 14, 2015 – do not benefit from the co-obligation of UBS Switzerland AG.
The index reflects the excess returns that are potentially available through an unleveraged investment in the contracts comprising the index plus the Treasury bill rate of interest that could be earned on funds committed to the trading of the underlying contracts. The only contract currently used to calculate the index is the West Texas Intermediate crude oil futures contract traded on the New York Mercantile Exchange.
The payout at maturity will be a cash amount equal to the current principal amount as of the final valuation date.
On the pricing date, the current principal amount was $25 per note. On each subsequent calendar day, it equals (a) the current principal amount on the previous calendar day multiplied by the daily index factor (b) minus the fee amount, which is 0.5% per year and accrues on a daily basis.
The daily index factor on any business day equals the index closing level on that day divided by the index closing level on the immediately preceding business day. It equals one on any calendar day that is not an index business day.
Beginning Feb. 26, the notes are putable subject to a minimum of 50,000 notes. Holders who put their notes will receive the current principal amount minus a redemption fee of 0.125% of the current principal amount.
The notes are callable beginning Feb. 23, 2017. The redemption price would be equal to the current principal amount.
The notes have been approved for listing on NYSE Arca under the symbol "OILX."
Issuer: | UBS AG, London Branch
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Issue: | Exchange-traded access securities
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Underlying index: | S&P GSCI Crude Oil Total Return index
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Amount: | $25 million
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Maturity: | Feb. 22, 2046
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Coupon: | 0%
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Face amount: | $25
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Payout at maturity: | Cash amount equal to current principal amount as of final valuation date
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Current principal amount: | $25 per note on pricing date; on each subsequent calendar day, (a) current principal amount on previous calendar day multiplied by daily index factor (b) minus fee amount, which is 0.5% per year and accrues daily
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Daily index factor: | On any business day, index closing level on that day divided by index closing level on immediately preceding business day; on any calendar day that is not an index business day, one
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Call option: | Beginning Feb. 23, 2017 at current principal amount
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Put option: | Beginning Feb. 26 at current principal amount minus 0.125% redemption fee, subject to minimum of 50,000 notes
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Pricing date: | Feb. 17
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Settlement date: | Feb. 22
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Agent: | UBS Securities LLC
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Listing: | NYSE Arca: OILX
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Cusip: | 90270L354
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