By Angela McDaniels
Tacoma, Wash., Sept. 19 - UBS AG, London Branch priced $1.21 million of 0% short leverage securities due Sept. 21, 2018 linked to the S&P 500 Total Return index, according to a 424B2 filing with the Securities and Exchange Commission.
The $1.17 million principal amount of notes priced at 103.5 for $1.21 million of proceeds. The face amount is $10.
The notes are putable at any time, subject to a minimum of 100,000 securities, and they will be called if the index increases to 135% of the initial level or more.
The payout at maturity or upon redemption will be par minus (a) 200% of the index return plus (b) the interest amount minus (c) the accrued borrow cost minus (d) the investor fee, which is 0.55% per year and accrues daily. The notes are not principal protected.
The interest amount is equal to the interest accrued on $30 at a rate per year equal to overnight Libor, compounded daily.
The accrued borrow cost is the sum of the daily borrow costs. Each day, the daily borrow cost equals the quotient of (a) the borrow notional multiplied by the borrow rate divided by (b) 360. On any day, the borrow notional is $20 multiplied by the quotient of the closing level of the index on the preceding day divided by the initial index level. The borrow rate is 0.3% plus the greater of (a) zero and (b) overnight Libor minus the Federal Funds open rate.
UBS Financial Services Inc. and UBS Investment Bank are the underwriters.
| Issuer: | UBS AG, London Branch
|
| Issue: | Short leverage securities
|
| Underlying index: | S&P 500 Total Return
|
| Principal amount: | $1,173,870.00
|
| Proceeds: | $1,214,955.45
|
| Maturity: | Sept. 21, 2018
|
| Coupon: | 0%
|
| Price: | $10.35 per $10.00 principal amount
|
| Payout at maturity: | Par minus (a) 200% of index return plus (b) interest amount minus (c) accrued borrow cost minus (d) investor fee of 0.55% per year
|
| Put option: | At any time, subject to minimum of 100,000 securities
|
| Call: | Automatically if index increases to 135% of initial level or more
|
| Initial index level: | 3,039.75
|
| Pricing date: | Sept. 17
|
| Settlement date: | Sept. 20
|
| Underwriter: | UBS Financial Services Inc. and UBS Investment Bank
|
| Fees: | 3.5%
|
| Cusip: | 90271M377
|
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