By Rebecca Melvin
New York, Sept. 10 - UBS AG priced a downsized $112.7 million of three-year mandatorily exchangeable notes with a 6.75% dividend and a 20% initial threshold premium linked to shares of GT Solar International Inc. after the close Thursday, according to a term sheet.
There is a $16.6 million greenshoe, which was downsized from $24 million.
The mandatories came at the cheap end of price talk, which was for a 6.25% to 6.75% dividend and a 20% to 25% initial premium; and the deal was smaller than the originally talked $131.7 million deal base plus a $24 million greenshoe.
UBS Securities LLC was the bookrunner of the mandatory offering. Concurrently with the mandatories, a GT Solar stockholder offered 11 million shares at $7.39 per share in a public offering via UBS Securities.
In addition, the selling stockholder sold 14 million additional GT Solar shares to UBS Securities and an affiliate in connection with the mandatory offering.
The mandatories, with a par price of $25 per note, mature Sept. 15, 2013 and are senior unsecured debt obligations of UBS AG. The bonds are takeover protected.
At maturity, UBS will exchange each note for shares, cash, or a combination of cash and shares equal to the sum of the daily settlement amounts for each of the 20 trading days in the 20 consecutive days prior to maturity.
Proceeds from the mandatories will be used by UBS to finance the forward sale of shares, to provide additional funds for its operations and for general corporate purposes outside Switzerland.
UBS AG is Switzerland's largest bank.
GT Solar is a Merrimack, N.H.-based designer and manufacturer of manufacturing equipment and a provider of services for the production of photovoltaic, wafers, cells and modules, and polysilicon.
| Issuer: | UBS AG
|
| Issue: | Mandatory exchangeable notes
|
| Underlying stock: | GT Solar International Inc.
|
| Amount: | $112.7 million, downsized from $131.7 million
|
| Greenshoe: | $16.6 million, downsized from $24 million
|
| Maturity: | Sept. 15, 2013
|
| Bookrunner: | UBS Securities LLC
|
| Concurrent offering: | 11 million shares of common stock at $7.39 per share
|
| Dividend: | 6.75%
|
| Price: | Par, $25
|
| Yield: | 6.75%
|
| Conversion premium: | 20%
|
| Threshold appreciation price: | $8.868
|
| Minimum conversion ratio: | 2.8191 per note
|
| Maximum conversion ratio: | 3.3829 per note
|
| Price talk: | 6.25%-6.75%, up 20% to 25%
|
| Pricing date: | Sept. 9
|
| Settlement date: | Sept. 15
|
| Stock symbol: | Nasdaq: SOLR
|
| Stock reference price: | $7.39
|
| Distribution: | Registered
|
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