UBS to price contingent income autocallables tied to Blackstone

By Toni Weeks

San Luis Obispo, Calif., June 26 – UBS AG, London Branch plans to price contingent income autocallable securities due July 7, 2017 linked to the common units of Blackstone Group LP, according to an FWP filing with the Securities and Exchange Commission.

If Blackstone units close at or above the downside threshold level, 75% of the initial price, on a quarterly determination date, the notes will pay a contingent payment of $0.29375 per $10 note for that quarter, equivalent to 11.75% per year.

If Blackstone units close at or above the applicable call threshold level on any of the first 11 quarterly determination dates, the notes will be automatically redeemed at par of $10 plus the contingent payment. The applicable call threshold is initially 105% of the initial share price, stepping up to 110% of the initial price on July 6, 2015 and to 115% of the initial price on July 5, 2016.

If the notes are not called and the final price is greater than or equal to the downside threshold level, the payout at maturity will be par plus the contingent payment. Otherwise, the payout will be a number of Blackstone units equal to $10 divided by the initial share price or, at the issuer's option, a cash amount equal to the value of those units.

UBS Securities LLC is the agent with Morgan Stanley Smith Barney LLC handling distribution.

The notes are expected to price July 3 and settle July 9.

The Cusip number is 90273E308.

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