By Angela McDaniels
Tacoma, Wash., July 12 - UBS AG, London Branch increased the maximum principal amount of 2x leveraged long exchange-traded access securities due May 24, 2041 linked to the Wells Fargo Business Development Company index that it may price to $200 million from $100 million, according to a 424B3 filing with the Securities and Exchange Commission.
The company priced $10 million of the notes at par of $25 on May 24, 2011. The remaining notes will be sold from time to time at varying prices.
The notes pay a quarterly coupon equal to the sum of the cash distributions that a hypothetical holder of the index constituents would have received during the quarter minus an accrued tracking fee of 0.85% per year.
The payout at maturity will be current principal amount plus 200% of the index return, which could be positive or negative, plus the final coupon amount minus the accrued tracking fee.
The current principal amount was $25 until May 31, 2011. For each subsequent month, the current principal amount is the previous current principal amount plus two times the index return on the monthly valuation date.
When calculating the index return, the final level will be the average of the index's closing levels on the 10 business days ending on the final valuation date, and the initial level will be its closing level on the most recent monthly valuation date.
For each month, the monthly valuation date is the last business day of the previous calendar month.
The notes are putable, subject to a minimum of 50,000 notes and a redemption fee of 0.125%. They became callable May 29, 2012. They will be accelerated if the indicative value of the notes falls to $5 or less or if the intraday index value decreases 30% from the most recent monthly initial closing level.
The notes are listed on NYSE Arca under the symbol "BDCL."
The index is meant to measure the performance of all business development companies that are listed on the New York Stock Exchange or Nasdaq and that satisfy specified market capitalization and other eligibility requirements. Business development companies are public vehicles that invest in private equity and debt and were created to increase financing available to small businesses.
UBS Investment Bank is the agent.
| Issuer: | UBS AG, London Branch
|
| Issue: | 2x leveraged long exchange-traded access securities
|
| Underlying index: | Wells Fargo Business Development Company index
|
| Amount: | Up to $200 million
|
| Maturity: | May 24, 2041
|
| Coupon: | Amount equal to cash distributions made by index constituents during quarter minus tracking fee of 0.85% per year; payable quarterly
|
| Face amount: | $25
|
| Payout at maturity: | Current principal amount plus two times index return plus final coupon minus tracking fee
|
| Call option: | From May 29, 2012 onward; notes will be accelerated if indicative value falls to $5 or less or if intraday index value decreases 30% from most recent monthly initial closing level
|
| Put option: | At any time, subject to minimum of 50,000 notes and 0.125% redemption fee
|
| Initial index level: | 865.13
|
| Pricing date: | May 24, 2011 for $10 million
|
| Settlement date: | May 27, 2011 for $10 million
|
| Cap increased: | July 12
|
| Agent: | UBS Investment Bank
|
| Fees: | Varies
|
| Listing: | NYSE Arca: BDCL
|
| Cusip: | 90267B765
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