By Toni Weeks
San Luis Obispo, Calif., March 18 – UBS AG, London Branch priced $2.25 million of airbag phoenix autocallable optimization securities due Jan. 23, 2017 linked to the common stock of Rock-Tenn Co., according to a 424B2 filing with the Securities and Exchange Commission.
Each month, the notes will pay a contingent coupon at the rate of 8.5% per year if Rock-Tenn shares close at or above the coupon barrier, 80% of the initial price, on the observation date for that month.
The notes will be automatically called at par if Rock-Tenn shares close at or above the initial price on any autocall observation date, which occur quarterly.
If the notes are not called and the final price of Rock-Tenn shares is greater than or equal to the conversion price, 83.75% of the initial price, the payout at maturity will be par. Otherwise, investors will receive a number of Rock-Tenn shares equal to $1,000 divided by the conversion price or, at the issuer’s option, the cash value of those shares.
UBS Financial Services Inc. and UBS Investment Bank are the agents.
| Issuer: | UBS AG, London Branch
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| Issue: | Airbag phoenix autocallable optimization securities
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| Underlying stock: | Rock-Tenn Co. (Symbol: RKT)
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| Amount: | $2.25 million
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| Maturity: | March 22, 2017
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| Coupon: | 8.5% annualized for each month Rock-Tenn shares close at or above coupon barrier on observation date for that month
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| Price: | Par
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| Payout at maturity: | If final price is greater than or equal to conversion price, par; otherwise, 18.0571 Rock-Tenn shares or, at issuer’s option, cash equivalent
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| Call: | At par if Rock-Tenn shares close at or above initial price on any quarterly autocall observation date
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| Initial price: | $66.12
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| Coupon barrier: | $52.90, 80% of initial price
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| Conversion price: | $55.38, 83.75% of initial price
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| Pricing date: | March 16
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| Settlement date: | March 19
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| Agents: | UBS Financial Services Inc. and UBS Investment Bank
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| Fees: | 1.5%
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| Cusip: | 90274P559
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