UBS plans to price 15-year callable CMS spread steepener notes

By Angela McDaniels

Tacoma, Wash., July 21 - UBS AG plans to price 100% principal protection callable CMS spread steepener notes due July 31, 2024, according to an FWP filing with the Securities and Exchange Commission.

Interest is payable quarterly. The notes will carry a fixed coupon of 12.5% for the first year. After that, interest will equal five times the spread of the 30-year Constant Maturity Swap rate over the two-year CMS rate. Each quarterly interest payment will be subject to a floor of zero and a cap of 12.5% per year.

The payout at maturity will be par.

Beginning July 31, 2010, the notes will be callable at par on any interest payment date.

The notes are expected to price July 28 and settle July 31.

UBS Investment Bank is the underwriter.

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