UBS to price trigger phoenix autocallables linked to Rio Tinto

By Angela McDaniels

Tacoma, Wash., Feb. 6 - UBS AG, London Branch plans to price trigger phoenix autocallable optimization securities due Feb. 14, 2013 linked to the American Depositary Shares of Rio Tinto plc, according to an FWP filing with the Securities and Exchange Commission.

If Rio Tinto ADSs close at or above the trigger price - 70% of the initial ADS price - on a quarterly observation date, the issuer will pay a contingent coupon for that quarter at the rate of 10.2% to 14.2% per year. Otherwise, no coupon will be paid that quarter. The exact contingent coupon rate will be set at pricing.

If the ADS close at or above the initial price on a quarterly observation date, the notes will be called at par of $10 plus the contingent coupon.

If the notes are not called and Rio Tinto ADSs finish at or above the trigger price, the payout at maturity will be par plus the contingent coupon. Otherwise, investors will be exposed to the ADS price decline from the initial price.

The notes (Cusip: 9026M0150) are expected to price Feb. 10 and settle Feb. 15.

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

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