By Marisa Wong
Madison, Wis., Nov. 29 - UBS AG, London Branch priced $10 million of 0% exchange-traded access securities Fisher-Gartman Risk On exchange-traded notes due Nov. 27, 2041 linked to the Fisher-Gartman Risk index, according to a 424B2 filing with the Securities and Exchange Commission.
The company plans to sell up to $100 million of the Risk On ETNs. The initial $10 million of notes priced at par of $25. The remaining $90 million will be sold from time to time at varying prices.
The Fisher-Gartman index consists of a mix of long and short positions in various asset classes, the overall value of which is expected to rise when the outlook on markets and the economy is positive and fall when the outlook is negative. Specifically, the index takes long positions in risk asset classes like commodities, equities and certain currencies and short positions in non-risk asset classes such as government bonds and certain "safe haven" currencies. The weightings for the long and short positions are 150% and 50%, respectively, and the index is rebalanced quarterly.
The current principal amount of each Risk On ETN at pricing was $25. For each subsequent day, the current principal amount will equal (a) the current principal amount on the immediately preceding calendar day, times (b) the daily index factor, minus (c) the tracking fee and minus (d) the annual distribution amount.
On any day, the daily index factor for the Risk On notes is equal to the index closing level on that day divided by the index closing level on the previous day.
The tracking fee is initially zero. On each day following the pricing date, the fee will equal 0.85% divided by 365 times the current principal amount on the preceding day.
The annual distribution amount is 1% times the current principal amount on the preceding day. The annual distribution amount only applies on the annual distribution valuation date, which is Dec. 30 of each year. The annual distribution amount is zero on all other days.
The payout at maturity will be the current principal amount of the securities on Nov. 22, 2041.
The Risk On notes are putable subject to a minimum of 50,000 notes and a redemption fee of 0.125% of the current principal amount. They are callable in whole beginning Dec. 3, 2012. The company will automatically redeem the notes if their indicative value falls to $5 or less or decreases in value by at least 60% as compared to the previous business day.
The notes were approved for listing on NYSE Arca under the symbol "ONN."
UBS Investment Bank is the agent.
| Issuer: | UBS AG, London Branch
|
| Issue: | Exchange-traded access securities
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| Underlying index: | Fisher-Gartman Risk index
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| Amount: | $10 million
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| Maturity: | Nov. 27, 2041
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| Coupon: | 0%
|
| Face amount: | $25
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| Payout at maturity: | Current principal amount of ETNs on Nov. 22, 2041
|
| Current principal amount: | Current principal amount on previous day times daily index factor, minus tracking fee and minus annual distribution amount, if applicable
|
| Daily index factor: | Index closing level on current day divided by index closing level on previous day
|
| Tracking fee: | 0.85% divided by 365 times current principal amount on preceding day
|
| Annual distribution fee: | On Dec. 30 of each year, 1% times current principal amount of previous day; otherwise, zero
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| Put option: | At any time subject to minimum of 50,000 notes and 0.125% redemption fee
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| Call option: | From Dec. 3, 2012 onward
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| Acceleration: | Notes will be automatically redeemed if their indicative value falls to $5 or less or decreases in value at least 60% as compared to the previous business day
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| Pricing date: | Nov. 29
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| Settlement date: | Dec. 2
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| Agent: | UBS Investment Bank
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| Listing: | NYSE Arca: ONN
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| Cusip: | 90268A717
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