UBS plans 100% principal protection notes tied to Consumer Price Index

By Angela McDaniels

Tacoma, Wash., June 15 - UBS AG plans to price 100% principal protection notes due June 28, 2013 linked to the Consumer Price Index, according to an FWP filing with the Securities and Exchange Commission.

The interest rate is fixed at 3.5% for the first year. After that, the interest rate will equal the year-over-year change in the index plus a spread of 2.7% to 3.2% per year, subject to a floor of zero. The exact spread will be set at pricing.

Interest will be payable monthly.

The payout at maturity will be par.

The notes are expected to price June 25 and settle June 30.

UBS Financial Services Inc. and UBS Investment Bank are the underwriters.

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