UBS to price 7.75% to 9% yield optimization notes linked to McDonald's

By Angela McDaniels

Tacoma, Wash., Feb. 11 - UBS AG plans to price yield optimization notes with contingent protection due Feb. 27, 2009 linked to the common stock of McDonald's Corp., according to an FWP filing with the Securities and Exchange Commission.

The notes will carry a coupon of 7.75% to 9% per year, with the exact coupon to be determined at pricing. Interest will be payable quarterly.

Par will equal the price of one McDonald's share on the pricing date, which will be Feb. 25. Settlement will occur on Feb. 29.

The payout at maturity will be par unless McDonald's stock falls by 25% or more during the life of the notes, in which case the payout will be one share of McDonald's per note.

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

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