UBS prices tender offers for $2.5 billion dollar pool 1, pool 2 bonds

By Susanna Moon

Chicago, Feb. 19 - UBS AG priced the dollar-denominated notes tender offers for up to $1 billion of pool 1 notes and up to $1.5 billion of pool 2 notes.

In the pool 1 offers, the total purchase price for the $2,381,597,000 of 5.75% notes due April 25, 2018 will be $1,195.30 and the tender offer price will be $1,163.70. The reference yield was 0.862%.

The total purchase price is $1,165.32 for the $2.5 billion of 4.875% notes due Aug. 4, 2020, and the tender offer price is $1,134.41. The reference yield is 1.965%.

As noted before, the total payments include an early tender premium of $30.00 per $1,000 principal amount of notes tendered by the early deadline on Feb. 19. Pricing was set using a settlement date of Feb. 22 for the total payment and of March 8 for the tender offer payment.

Pricing was set at 9 a.m. ET on Feb. 19 using a reference security plus a fixed spread as follows:

• For the 5.75% notes, a fixed spread of 92 basis points over the 0.875% Treasury due Jan. 31, 2018; and

• For the 4.875% notes, a fixed spread of 47 bps over the 1.625% Treasury due Nov. 15, 2022.

Pool 2 dollar notes

The pricing information for the pool 2 offers is as follows:

• $1,009.21 total payment for the $1.5 billion of 2.25% notes due Aug. 12, 2013 with a tender payment of $978.35 and reference yield of 0.146%;

• $1,017.85 total payment for the $1 billion of 2.25% notes due Jan. 28, 2014 with a tender payment of $987.00 and reference yield of 0.183%;

• $1,010.00 total payment for the $750 million of floating-rate notes due Jan. 28, 2014 with a tender payment of $980;

• $1,065.22 total payment for the $1.5 billion of 3.875% notes due Jan. 15, 2015 with a tender payment of $1,033.69 and reference yield of 0.27%; and

• $1,202.37 total payment for the $3 billion of 5.875% notes due Dec. 20, 2017 with a tender payment of $1,170.57 and reference yield of 0.862%.

Pricing for all of the pool 2 notes except for the floaters was based on a reference security plus a fixed spread:

• For the 2.25% notes, a fixed spread of 15 bps over the 0.375% Treasury due July 15, 2013;

• For the 2.25% notes, a fixed spread of 15 bps over the 1% Treasury due Jan. 15, 2014;

• For the 3.875% notes, a fixed spread of 15 bps over the 0.25% Treasury due Jan. 31, 2015; and

• For the 5.875% notes, a fixed spread of 65 bps over the 0.875% Treasury due Jan. 31, 2018.

The payouts for the pool 2 notes also include a $30.00 early participation amount per $1,000 principal amount of notes tendered by the early deadline. UBS will also pay accrued interest.

As with the pool 1 notes, pricing for the pool 2 notes except for the floaters assumes a settlement date of Feb. 22 for the total payments and of March 8 for the tender payments.

Those who tender their notes after the early deadline will receive the tender payment, or the total payment less the early payment.

The tender offers will end at 11:59 p.m. ET on March 5.

More tender offers

UBS began the cash tender offers on Feb. 5 for up to CHF 5 billion of several series of notes denominated in dollars, euros and Italian lira.

The Zurich-based bank said at the time that the offers were part of its effort to manage the composition of its liabilities.

The tender offer period for the euro- and lira-denominated securities ended on Feb. 19.

Euro, lira offers

The following euro-denominated and lira-denominated securities are covered by the offers:

• €1.25 billion of floating-rate notes due 2013 with a purchase price of €1,002.10 per €1,000 principal amount;

• €750 million of floating-rate notes due 2014 with a purchase price of €1,006.70 per €1,000 principal amount;

• €1.5 billion of 5.625% notes due 2014 with a purchase spread of 11 bps over the applicable interpolated mid-swap rate;

• €1.75 billion of 3.5% notes due 2015 with a purchase spread of 20 bps;

• €1.5 billion of 3.125% notes due 2016 with a purchase spread of 20 bps;

• €750 million of 4.75% notes due 2017 with a purchase spread of 20 bps; and

• 1,225,555,000,000 lira of zero-coupon notes due 2027 with a minimum purchase price of 59. These notes were originally issued by Union Bank of Switzerland Finance NV.

There is a €2.25 billion tender cap for the above-listed notes. UBS will also pay accrued interest.

Pricing is slated for Feb. 20, with settlement on Feb. 22.

The dealer manager is UBS Ltd. (44 207 567 0525 or OL-liability-management@ubs.com).

The tender agent is Lucid Issuer Services Ltd. (44 20 7704 0880 or ubs@lucid-is.com, attn: Yves Theis/Paul Kamminga).

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