New Issue: UBS prices $1.53 million capped knock-out notes linked to S&P 500

By Angela McDaniels

Tacoma, Wash., July 17 - UBS AG, London Branch priced $1.53 million of 0% capped index knock-out notes due July 31, 2013 linked to the S&P 500 index, according to a 424B2 filing with the Securities and Exchange Commission.

A knock-out event occurs if the index's closing level is less than the initial index level by more than 23.25% on any day during the life of the notes.

If a knock-out event does not occur, the payout at maturity will be par plus 10%.

If a knock-out event occurs, the payout will be par plus the lesser of the index return, which may be positive or negative, and the maximum return, which is 10%.

UBS Investment Bank is the underwriter, and J.P. Morgan Securities LLC and JPMorgan Bank NA are dealers.

Issuer:	UBS AG, London Branch
Issue:	Capped index knock-out notes
Underlying index:	S&P 500
Amount:	$1,533,000
Maturity:	July 31, 2013
Coupon:	0%
Price:	Par
Payout at maturity:	If knock-out event does not occur, par plus 10%; if knock-out event occurs, par plus lesser of index return, with full exposure to any losses, and maximum return of 10%
Knock-out event:	Index's closing level is less than initial index level by more than 23.25% on any day during life of notes
Initial index level:	1,356.78
Pricing date:	July 13
Settlement date:	July 18
Underwriter:	UBS Investment Bank
Dealers:	J.P. Morgan Securities LLC and JPMorgan Bank NA
Fees:	1%
Cusip:	902674KZ2

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