UBS plans FI Enhanced ETNs linked to MSCI World High Dividend Yield

By Angela McDaniels

Tacoma, Wash., Feb. 18 – UBS AG, London Branch plans to price 0% FI Enhanced Global High Yield exchange-traded notes due March 3, 2026 linked to the MSCI World High Dividend Yield USD Gross Total Return index, according to a 424B2 filing with the Securities and Exchange Commission.

The securities are designed to provide a two times leveraged long exposure to the performance of the index compounded on a quarterly basis, reduced by the accrued fees.

The payout at maturity will be (a) the product of (i) the current principal amount and (ii) the index factor minus (b) the accrued fees.

The current principal amount will be $100 until April 1. For each subsequent quarter, it will be reset to equal the previous current principal amount multiplied by the index factor on the applicable quarterly valuation date minus the accrued fees.

The index factor is one plus two times the index performance ratio, which equals the percentage change in the index on that day over the level of the index on the quarterly valuation date for the previous quarter.

The accrued fees are the sum of the accrued tracking fee, 0.8% per year, and the accrued financing charge, Libor plus 100 basis points per year.

The notes are putable subject to a minimum of 12,500 notes and a 0.125% redemption fee. The first put date is March 2 for redemptions of 12,500 to 1,999,999 notes and March 8 for redemptions of 2 million or more notes.

Beginning Feb. 24, 2017, the issuer may call the notes in whole. In addition, the notes will be accelerated if the indicative value of the notes falls to $20 or less.

A loss rebalancing event occurs if the closing indicative value on any trading day decreases by 40% in value from the closing indicative value on the previous quarterly valuation date. A loss rebalancing event will have the effect of deleveraging the notes with the aim of resetting the then-current leverage to about 2. Each time a loss rebalancing event occurs, investors will incur a loss rebalancing fee of 0.05%.

The notes have been approved for listing on NYSE Arca under the symbol “FIHD.”

The index is designed to track the performance of large- and mid-cap stocks (excluding REITs) across 23 developed markets countries tracked by the MSCI World index with higher-than-average dividend yields that are potentially both sustainable and persistent.

UBS Securities LLC is the underwriter.

The notes are expected to price Feb. 19.

The Cusip number is 90274D218.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.