UBS announces mandatory redemptions for six series of ETracs

By Sarah Lizee

Olympia, Wash., March 17 – UBS Investment Bank announced mandatory redemptions for several series of its exchange-traded access securities.

The following ETracs will be redeemed:

• $700 million series A 2×Leveraged Long ETracs due May 24, 2041 linked to the Wells Fargo Business Development Company index (NYSE: BDCL, Cusip: 90267B765);

• $100 million series B 2×Leveraged Long ETracs due April 26, 2041 linked to the Wells Fargo Business Development Company index (NYSE: LBDC, Cusip: 90274D416);

• $100 million Monthly Pay 2xLeveraged ETracs due Sept. 30, 2044 linked to the Solactive US High Dividend Low Volatility index (NYSE: HDLV, Cusip: 90270L727);

• $775 million series A Monthly Pay 2xLeveraged ETracs due Oct. 16, 2042 linked to the MVIS US Mortgage REITs index (NYSE: MORL, Cusip: 90269A302);

• $450 million series B Monthly Pay 2xLeveraged ETracs due Oct. 16, 2042 linked to the MVIS US Mortgage REITs index (NYSE: MRRL, Cusip: 90274D432); and

• $100 million Monthly Pay 2xLeveraged ETracs due June 24, 2044 linked to the Wells Fargo Master Limited Partnership ex Energy index (NYSE: FMLP, Cusip: 90273A108).

The securities due June 24, 2044 are being redeemed as a result of the occurrence of an acceleration upon minimum indicative value on March 16, the acceleration trigger date, triggered as a result of the intraday indicative value of the securities on the acceleration date decreasing by more than 60% in value from the closing indicative value of the securities on the previous monthly valuation date.

The securities due May 24, 2041, April 26, 2041, Sept. 30, 2044 and Oct. 16, 2042 are being redeemed as a result of the occurrence of an acceleration upon minimum indicative value, triggered as a result of the indicative value of the securities being less than $5.00 on March 16.

The acceleration settlement date for the securities due May 24, 2041 and April 26, 2041 will be April 2, and the acceleration settlement date for remaining securities will be March 25.

According to 424B2 filings with the Securities and Exchange Commission, the acceleration amount will equal (a) the product of (i) the current principal amount and (ii) the index factor as of the last index business day in the acceleration valuation period plus (b) the coupon amount with respect to the coupon valuation date immediately preceding the acceleration date if on the last index business day in the acceleration valuation period the coupon ex-date with respect to such coupon amount has not yet occurred, plus (c) the adjusted coupon amount, if any, minus (d) the accrued tracking fee as of the last index business day in the acceleration valuation period, minus (e) the accrued financing charges as of the last index business day in the acceleration valuation period plus (f) the stub reference distribution amount as of the last index business day in the acceleration valuation period, if any.

UBS is a financial services company based in Zurich.

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