UBS plans to price 15-year callable CMS spread steepener notes

By Jennifer Chiou

New York, Oct. 8 - UBS AG plans to price 100% principal protection callable CMS spread steepener notes due Oct. 29, 2024, according to an FWP filing with the Securities and Exchange Commission.

Interest is payable quarterly. The notes will carry a fixed coupon of 11.5% for the first year. After that, interest will equal four times the spread of the 10-year Constant Maturity Swap rate over the two-year CMS rate. Each quarterly interest payment will be subject to a floor of zero and a cap of 15% per year.

The payout at maturity will be par.

Beginning Oct. 29, 2010, the notes will be callable at par on any interest payment date.

The notes are expected to price on Oct. 23 and settle on Oct. 29.

UBS Investment Bank is the underwriter.

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