UBS gives results of exchange offers for five series of Etracs

By Sarah Lizee

Olympia, Wash., Aug. 6 – UBS AG announced the final results of its previously announced voluntary exchange offers for five Etracs series A ETNs for corresponding Etracs series B ETNs.

The offers launched on July 21 expired at 4:59 p.m. ET on Aug. 5.

Settlement will occur Aug. 7.

By the expiration date, holders had tendered the following for exchange:

• $229,740,525 of the Etracs Alerian MLP index ETN due July 18, 2042 (Cusip: 90267B682) for Etracs Alerian MLP index ETN, series B due July 18, 2042 (Cusip: 90274D374);

• $42,839,625 of the Etracs linked to the Wells Fargo Business Development Company index due April 26, 2041 (Cusip: 902641588) for Etracs Wells Fargo Business Development Co. index ETN series B due April 26, 2041 (Cusip: 90274D416);

• $36,842,900 of the Etracs linked to the Bloomberg Commodity index Total Return due Oct. 31, 2039 (Cusip: 902641679) for Etracs Bloomberg Commodity index Total Return ETN series B due Oct. 31, 2039 (Cusip: 90269A450);

• $473,391,775 of the Etracs linked to the Alerian MLP Infrastructure index due April 2, 2040 (Cusip: 902641646) for Etracs Alerian MLP Infrastructure index ETN series B due April 2, 2040 (Cusip: 90274D382); and

• $15,427,325 of the Etracs linked to the UBS Bloomberg Constant Maturity Commodity index Total Return due April 5, 2038 (Cusip: 902641778) for Etracs UBS Bloomberg Constant Maturity Commodity index Total Return ETN series B due April 5, 2038 (Cusip: 90274D390).

The voluntary exchange offers with respect to UBS’ 2×Leveraged Long Etracs linked to the Wells Fargo Business Development Company index due May 24, 2041 (Cusip: 90267B765) and Etracs Monthly Pay 2xLeveraged Mortgage REIT ETN due Oct. 16, 2042 (Cusip: 90269A302) were each terminated effective as of March 16 as a result of the mandatory redemption of those securities following the occurrence of an acceleration upon minimum indicative value on March 16.

The voluntary exchange offer with respect to the Etracs Monthly Pay 2xLeveraged Closed-End Fund ETN due Dec. 10, 2043 (Cusip: 90270L842) was terminated effective as of March 18 as a result of its mandatory redemption following the occurrence of an acceleration upon minimum indicative value on March 18.

Each series B ETN that was offered in the exchange offers is intended to provide the same economic exposure as the corresponding series A ETN, including identical underlying indices, daily closing indicative values, investor fees, coupon amounts, if applicable, and payment formulas.

The key difference between the series A ETNs and the series B ETNs is that UBS and UBS Switzerland AG are each co-obligors on all series A ETNs, while UBS is the only issuer and obligor on all series B ETNs. UBS Switzerland has no obligations with respect to the series B ETNs.

UBS conducted the exchange offers in order to reduce the intercompany exposures of UBS Switzerland to UBS in line with regulatory recovery and resolution guidance.

UBS also announced that it has suspended further sales from inventory of each of the series A ETNs. In addition, UBS announced a waiver of the minimum early redemption size for each series of ETNs. Currently, holders of the ETNs are required to redeem at least 50,000 ETNs at one time in order to exercise their right to redeem the ETNs directly with the issuer.

UBS has a contractual right to redeem all series A ETNs and UBS intends to exercise its contractual call right for any non-tendered series A ETNs that were subject to the exchange offers within the next few months.

The information agent is D.F. King & Co. Inc. (800 591-8269 toll free, 212 269-5550 for banks and brokers or ubs@dfking.com).

The financial services company is based in Basel and Zurich, Switzerland.

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