By Angela McDaniels
Tacoma, Wash., July 21 - UBS AG, London Branch priced $10 million of 0% Internet IPO exchange-traded access securities due July 19, 2041 linked to the UBS Internet IPO index, according to a 424B2 filing with the Securities and Exchange Commission.
The company plans to sell up to $100 million of the securities. The initial $10 million of notes priced at par of $25. The remaining $90 million will be sold from time to time at varying prices.
The notes began trading Thursday on NYSE Arca under the symbol "EIPO."
The UBS Internet IPO index is a total return index intended to measure the performance of internet-related companies listed on the New York Stock Exchange or Nasdaq that have gone public within the last three years. The top 10 holdings as of July 7 are LinkedIn Corp., HomeAway Inc., Yandex NV, Rackspace Hosting, Inc., Pandora Media Inc., Renren, Inc., OpenTable, Inc., Ancestry.com, Inc., SouFun Holdings Ltd. and Demand Media, Inc.
The current principal amount of each note is $25 until July 31. For each subsequent month, the current principal amount will equal the previous current principal amount plus the index factor on the applicable monthly valuation date minus the accrued tracking fee on that monthly valuation date.
The index factor is the percentage change from the index's closing level on the monthly valuation date for the previous month to the index valuation level, the average of its closing levels on the last five trading days ending on the monthly valuation date for the current month.
The tracking fee is 0.65% per year multiplied by the product of (a) the current principal amount multiplied by (b) the index factor on the monthly valuation date.
The payout at maturity will be the current principal amount times the index factor on the last trading day in the final measurement period - the five-day period that begins July 10, 2041 - minus the accrued fees as of the last trading day in the final measurement period.
The notes are putable subject to a minimum of 50,000 and a redemption fee of 0.125% of the current principal amount. They are callable in whole beginning July 23, 2012. The company will automatically redeem the notes if their indicative value falls to $5 or less or decreases in value by at least 60% as compared to the previous business day.
UBS Investment Bank is the agent.
| Issuer: | UBS AG, London Branch
|
| Issue: | Internet IPO exchange-traded access securities
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| Underlying index: | UBS Internet IPO index
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| Amount: | $10 million
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| Maturity: | July 19, 2041
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| Coupon: | 0%
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| Face amount: | $25
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| Payout at maturity: | Current principal amount plus index's month-over-month return minus accrued tracking fee, which is 0.65% per year; current principal amount is $25 until July 31; after that, current principal amount equals previous current principal amount plus index's month-over-month return minus accrued tracking fee
|
| Put option: | At any time subject to minimum of 50,000 notes and 0.125% redemption fee
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| Call option: | From July 23, 2012 onward
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| Acceleration: | Notes will be automatically redeemed if their indicative value falls to $5 or less or decreases in value at least 60% as compared to the previous business day
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| Initial index level: | 97.74
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| Pricing date: | July 20
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| Settlement date: | July 21
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| Agent: | UBS Investment Bank
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| Fees: | Varies
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| Listing: | NYSE Arca: EIPO
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| Cusip: | 90268A774
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