UBS to price €3.2 billion mandatories due 2012 exchangeable for BBVA, talked at 3.2%-3.3%, up 18%-21%

By Evan Weinberger

New York, July 24 - UBS AG Jersey Branch plans to price €3.2 billion in mandatory exchangeable notes due July 31, 2012 linked to shares of Banco Bilbao Vizcaya Argentaria SA.

The exchangeables are being talked at a coupon of 3.2% to 3.3% plus a variable coupon that will pass through the dividend on the underlying stock.

They have an upper threshold talked at 118% to 121% and a lower threshold of 85%. The exchangeables are talked at a conversion ratio of 1 to 0.72034 to 0.70248.

UBS Ltd. is bookrunner of the Regulation S transaction. The bonds will be offered at par and are expected to price Thursday.

The exchangeables are callable at any time. There are no puts. Holders of the exchangeables can redeem their holdings at any time at the minimum conversion rate.

There are standard anti-dilution protections. The settlement date is July 31.

The transaction is being done on behalf of Spanish billionaire Manuel Jove, who is trying to acquire 5% of the Bilbao, Spain-based bank.

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