By Toni Weeks
San Luis Obispo, Calif., Dec. 2 – UBS AG, London Branch priced $25 million of a planned up to $100 million overall issue of 0% E-Tracs S&P Veqtor Switch exchange-traded notes due Dec. 2, 2044 linked to the S&P 500 Veqtor Switch Total Return index, according to a 424B2 filing with the Securities and Exchange Commission.
The index is a composite index that seeks to simulate a dynamic portfolio that allocates between U.S. equities and volatility futures based on realized volatility in the U.S. large market capitalization equity market. The allocation to the equity component is dynamically adjusted exposure to the S&P 500 Total Return index with a target equity component volatility of 10%.
The notes were approved for trading on NYSE Arca under the symbol “VQTS.”
The initial principal amount of each note is $25. For each subsequent day, the current principal amount will equal the previous current principal amount plus the daily index factor minus the 0.95% annualized tracking fee.
The index factor is equal to the closing level on the trading day divided by the closing level from the previous trading date.
The payout at maturity will be the current principal amount on the final valuation date.
The notes are putable subject to a minimum of 50,000 securities and a redemption fee of 0.125% of the current principal amount. They are callable in whole beginning on Dec. 3, 2015. The company will automatically redeem the notes if their indicative value falls to $5 or less or decreases in value by at least 60% as compared to the previous business day.
UBS Investment Bank is the agent.
| Issuer: | UBS AG, London Branch
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| Issue: | E-Tracs E-Tracs S&P Veqtor Switch exchange-traded notes
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| Underlying index: | S&P 500 Veqtor Switch Total Return index
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| Amount: | $100 million (maximum)
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| Maturity: | Dec. 2, 2044
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| Coupon: | 0%
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| Face amount: | $25.00
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| Payout at maturity: | Current principal amount on the final valuation date; current principal amount equals the previous current principal amount plus the daily index factor minus the 0.95% annualized tracking fee
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| Put option: | At any time subject to minimum of 50,000 notes and 0.125% redemption fee
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| Call option: | From Dec. 3, 2015 onwards
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| Acceleration: | Notes will be automatically redeemed if their indicative value falls to $5 or less or decreases in value at least 60% as compared to the previous business day
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| Pricing date: | Dec. 2 (for $25 million)
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| Settlement date: | Dec. 5
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| Agent: | UBS Investment Bank
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| Fees: | Varies
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| Listing: | NYSE Arca: VQTS
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| Cusip: | 90274D705
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