By E. Janene Geiss
Philadelphia, Aug. 27 - UBS AG priced $7.48 million of 0% optimization securities with contingent return due Feb. 29, 2012 linked to a basket of exchange-traded funds, according to a 424B2 filing with the Securities and Exchange Commission.
The basket consists of the iShares MSCI EAFE index fund with a 70% weight and the iShares MSCI Emerging Markets index fund with a 30% weight.
If the basket return is greater than the contingent return of 9%, the payout will be par of $10.00 plus the lesser of the basket return and a maximum gain of 20.56%.
If the basket return is equal to or less than the contingent return and the basket level is equal to or greater than a trigger level of 75%, the payout will be par plus 9%.
If the basket level is below the trigger level, the contingent return is lost and investors are fully exposed to any basket decline.
UBS Financial Services Inc. and UBS Investment Bank are the underwriters.
| Issuer: | UBS AG
|
| Issue: | Optimization securities with contingent return
|
| Underlying basket: | iShares MSCI EAFE index fund (70%) and iShares MSCI Emerging Markets index fund (30% weight)
|
| Amount: | $7,484,260
|
| Maturity: | Feb. 29, 2012
|
| Coupon: | 0%
|
| Price: | Par of $10
|
| Payout at maturity: | If basket return is greater than 9%, payout is par plus the lesser of basket return or 20.56%; if return is equal or less than 9% and equal or greater than 75% trigger, payout is par plus 9%; if basket return is below 75%, full exposure to any losses
|
| Starting fund levels: | $49.55 for iShares MSCI EAFE index fund; $39.62 for iShares MSCI Emerging Markets index fund
|
| Trigger level: | 75% of initial basket level
|
| Contingent return: | 9%
|
| Maximum return: | 20.56%
|
| Pricing date: | Aug. 26
|
| Settlement date: | Aug. 31
|
| Underwriters: | UBS Financial Services Inc. and UBS Investment Bank
|
| Fees: | 1.75%
|
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