New Issue: UBS prices $2.55 million three-year contingent income autocallables linked to Coach

By Toni Weeks

San Luis Obispo, Feb. 4 - UBS AG, London Branch priced $2.55 million of contingent income autocallable securities due Feb. 4, 2016 linked to the common stock of Coach, Inc., according to a 424B2 filing with the Securities and Exchange Commission.

If Coach shares close at or above the downside threshold level - 75% of the initial share price - on a quarterly determination date, investors will receive a contingent payment of $0.2213 for each $10.00 note. Otherwise, no contingent payment will be made for that period. The contingent payment is equivalent to 8.85% per year.

If the closing share price is greater than or equal to the call threshold level on any of the first 11 quarterly determination dates, the notes will be automatically redeemed at par plus the contingent payment. The call threshold level is initially 95% of the initial stock price, stepping down to 90% of the initial stock price on Jan. 31, 2014 and to 85% of the initial stock price on Feb. 2, 2015.

If the notes are not called and the final share price is greater than or equal to the downside threshold level, the payout at maturity will be par plus the contingent payment. If the final price is less than the downside threshold level, the payout will be a number of Coach shares equal to $10.00 divided by the initial share price or, at the issuer's option, an equivalent cash amount.

UBS Securities LLC is the agent. Distribution is through Morgan Stanley Smith Barney LLC.

Issuer:	UBS AG, London Branch
Issue:	Contingent income autocallable securities
Underlying stock:	Coach, Inc. (Symbol: COH)
Amount:	$2,547,300
Maturity:	Feb. 4, 2016
Contingent payment:	If Coach shares close at or above downside threshold on quarterly determination date, $0.2213 per note; otherwise, no contingent payment for that period
Price:	Par of $10.00
Payout at maturity:	If final share price is greater than or equal to downside threshold, par plus $0.2213; if final share price is less than downside threshold, $10 divided by initial share price or, at issuer's option, cash amount equal to value of those shares
Call:	Automatically at par plus $0.2213 if closing share price is greater than or equal to call threshold level on any of first 11 quarterly determination dates
Initial share price:	$51.00
Downside threshold:	$38.25, 75% of initial share price
Call threshold levels:	Initially $48.45, or 95% of initial price, stepping down to $45.90, or 90% of initial price, on Jan. 31, 2014 and to $43.35, or 85% of initial price, on Feb. 2, 2015
Pricing date:	Jan. 31
Settlement date:	Feb. 5
Agent:	UBS Securities LLC
Distribution:	Morgan Stanley Smith Barney LLC
Fees:	2.25%
Cusip:	90271B413

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