UBS to price autocallable optimization securities linked to 3M

By Angela McDaniels

Tacoma, Wash., July 17 - UBS AG plans to price 0% autocallable optimization securities with contingent protection due Aug. 4, 2009 linked to the common stock of 3M Co., according to an FWP filing with the Securities and Exchange Commission.

The notes will be automatically called if 3M stock closes at or above its initial price on Oct. 28, 2008, Jan. 28, 2009, April 28, 2009 or July 29, 2009. If the notes are called, the redemption amount will be par of $10 plus an annualized return of 18.5% to 21.5% to the redemption date. The exact return will be set at pricing.

If the notes are not called, the payout at maturity will be par unless 3M stock closes below the trigger price - 75% of the initial price - during the life of the notes and finishes below the initial price, in which case investors will be fully exposed to the share price decline.

The notes are expected to price on July 28 and settle on July 31.

UBS Financial Services Inc. and UBS Investment Bank will be the underwriters.

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