By Angela McDaniels
Tacoma, Wash., June 25 – UBS AG, London Branch priced $25 million principal amount of monthly pay 2x leveraged exchange-traded access securities due June 24, 2044 linked to the Wells Fargo Master Limited Partnership ex Energy index, according to a 424B2 filing with the Securities and Exchange Commission.
The company sold the notes at par of $25 to underwriter UBS Securities LLC.
UBS plans to issue up to $100 million of the notes. The remainder will be sold from time to time at varying prices.
The notes pay a variable monthly coupon linked to two times the cash distributions, if any, made on the index constituents. If the index constituents do not make distributions, then investors will not receive any coupons.
The notes are putable, subject to a minimum of 50,000 notes and a redemption fee of 0.125%. They are callable in whole beginning June 29, 2015.
The notes have been approved for listing on the NYSE Arca under the symbol "LMLP."
Index
The notes are linked to the monthly compounded two times leveraged performance of the index, which is designed to measure the performance of all non-energy master limited partnerships listed on the New York Stock Exchange, NYSE MKT or Nasdaq that satisfy the $100 million market capitalization and other eligibility requirements.
Two times the index yield as of June 20 was 15.24%.
The top 10 constituents of the index as of June 20 were KKR & Co. LP (10.86% weight), Blackstone Group LP (10.48% weight), Lazard Ltd. (10.43% weight), Carlyle Group LP (10.33% weight), Icahn Enterprises LP (10.31% weight), Och-Ziff Capital Management Group LLC (9.48% weight), Apollo Global Management LLC (9.29% weight), Oaktree Capital Group LLC (9.12% weight), Fortress Investment Group LLC (4.92% weight) and Cedar Fair LP (4.35% weight).
Payout
The payout at maturity will be the current principal amount plus 200% of the index return, which could be positive or negative, plus the final coupon amount minus the accrued fees, which are a tracking fee of 0.85% per year and a financing charge of Libor plus 60 basis points.
The current principal amount is $25 until the first monthly valuation date. For each subsequent calendar month, the current principal amount is reset to the previous current principal amount plus two times the index return on the monthly valuation date minus accrued fees 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.
| Issuer: | UBS AG, London Branch
|
| Issue: | Monthly pay 2x leveraged exchange-traded access securities
|
| Underlying index: | Wells Fargo Master Limited Partnership ex Energy index
|
| Amount: | Up to $100 million
|
| Maturity: | June 24, 2044
|
| Coupon: | Payable monthly in amount linked to 200% of cash distributions, if any, made on index constituent securities
|
| Face amount: | $25
|
| Payout at maturity: | Current principal amount plus 200% of index return plus final coupon amount minus accrued fees tracking fee of 0.85% per year and accrued financing charge of Libor plus 60 bps
|
| Call option: | In whole beginning June 29, 2015
|
| Put option: | At any time, subject to minimum of 50,000 notes and 0.125% redemption fee
|
| Initial index level: | 3,650.06
|
| Pricing date: | June 24
|
| Settlement date: | June 27 (for $25 million)
|
| Underwriter: | UBS Securities LLC
|
| Fees: | None
|
| Expected listing: | NYSE Arca: LMLP
|
| Cusip: | 90273A207
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