By Susanna Moon
Chicago, Jan. 22 – UBS AG, London Branch priced $565,000 of airbag phoenix autocallable notes due July 22, 2016 linked to Valero Energy Corp. shares, according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a monthly contingent coupon at an annual rate of 10.5% if Valero shares close at or above the coupon barrier, 75% of the initial share price, on the observation date for that month.
If the stock closes at or above the initial price on any quarterly autocall observation date, the notes will be called at par plus the contingent coupon.
If the notes are not called and the shares finish at or above the conversion price, 82% of the initial share price, the payout at maturity will be par.
Otherwise, investors will receive a number of shares of Valero stock equal to $1,000 divided by the conversion price.
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: | Valero Energy Corp. (Symbol: VLO)
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| Amount: | $565,000
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| Maturity: | July 22, 2016
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| Coupon: | 10.5% annualized for each month Valero 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 share price is greater than or equal to conversion price, par; otherwise, 26.8601 Valero shares
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| Call: | At par if Valero shares close at or above initial share price on any quarterly autocall observation date
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| Initial share price: | $45.40
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| Coupon barrier: | $34.05, 75% of initial share price
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| Conversion price: | $37.23, 82% of initial share price
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| Pricing date: | Jan. 16
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| Settlement date: | Jan. 22
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| Underwriters: | UBS Financial Services Inc. and UBS Investment Bank
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| Fees: | 1.5%
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| Cusip: | 90274F684
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