New Issue: UBS prices $490,000 26.65% reverse convertibles linked to DryShips

By Angela McDaniels

Tacoma, Wash., Oct. 13 - UBS AG priced $490,000 of reverse convertible notes due Jan. 14, 2010 linked to the common stock of DryShips Inc., according to a 424B2 filing with the Securities and Exchange Commission.

The three-month notes pay 6.6625% for an annualized coupon of 26.65%. Interest is payable monthly.

The payout at maturity will be par unless DryShips stock falls below the trigger price - 65% of the initial share price - during the life of the notes and finishes below the initial share price, in which case the payout will be a number of DryShips shares equal to $1,000 divided by the initial share price.

UBS Securities LLC and UBS Investment Bank are the underwriters.

Issuer:	UBS AG
Issue:	Reverse convertible notes
Underlying stock:	DryShips Inc. (Nasdaq: DRYS)
Amount:	$490,000
Maturity:	Jan 14, 2010
Coupon:	26.65%, payable monthly
Price:	Par
Payout at maturity:	If DryShips stock falls below trigger price during life of notes and finishes below initial price, 146.8429 DryShips shares; otherwise, par
Initial share price:	$6.81
Trigger price:	$4.43, 65% of initial price
Pricing date:	Oct. 9
Settlement date:	Oct. 15
Underwriters:	UBS Securities LLC and UBS Investment Bank
Fees:	2%

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