UBS gets OK to convert covered bonds due 2019, 2022 into soft bullets

By Susanna Moon

Chicago, Oct. 27 – UBS AG, London Branch secured the needed consents to amend its €1 billion of series 2009-2 3.875% covered bonds due 2019 and its €1.25 billion of series 2010-2 4% covered bonds due 2022 to convert them into soft bullets.

Settlement has been set for Oct. 31, according to a bank notice.

As announced Sept. 28, the amendments will bring the terms of the bonds into line with those “those commonly seen in the covered bond market, and as most recently issued by the issuer, to ensure ongoing cost efficiency of this funding program.”

The bank sought to modify the terms of the bonds to convert them from hard bullet covered bonds, with an extended due for payment date, and consequentially to modify the covered bond swaps.

An early participation fee of 0.05% will be paid to bondholders who gave consents by 11 a.m. ET on Oct. 14 if the amendments are approved by a majority of holders for that series of notes.

Bondholders could submit consents until 11 a.m. ET on Oct. 24, although those delivering consents after the early deadline will not receive a participation fee.

UBS Ltd. (+44 20 7568 2133 or mailto:ol-liabilitymanagement-eu@ubs.com) is acting as solicitation agent. Lucid Issuer Services Ltd. (+44 20 7704 0880, Paul Kamminga, ubs@lucid-is.com) is acting as the tabulation agent.

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