By Marisa Wong
Morgantown, W.Va., June 4 – UBS AG, London Branch priced $200 million of reopened ETracs Monthly Pay 2xLeveraged Mortgage REIT exchange-traded notes, series B, due Oct. 16, 2042 linked to the MVIS US Mortgage REITs index, according to a 424B3 filing with the Securities and Exchange Commission.
UBS originally priced $100 million of the securities and sold $37.5 million of the ETNs on Oct. 8, 2015. The issuer then priced a $150 million add-on in October 2018. The latest add-on brings the total issue size to $450 million. The reopened securities will be sold from time to time at varying prices.
The index tracks the overall performance of publicly traded mortgage REITs that derive at least 50% of their revenues from mortgage-related activities.
The notes have a face value of $25.
The notes pay a monthly coupon linked to two times the cash distributions that a hypothetical holder of the index’s constituents would have received during the month minus accrued fees.
The payout at maturity will be based on the compounded leveraged monthly performance of the index less accrued fees. The leverage factor is two, and fees include a 0.4% annualized tracking rate and a financing rate of Libor plus 40 basis points.
The notes are listed on NYSE Arca under the symbol “MRRL.”
UBS Investment Bank is the agent.
| Issuer: | UBS AG, London Branch
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| Issue: | Etracs Monthly Pay 2xLeveraged Mortgage REIT ETNs
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| Underlying index: | MVIS US Mortgage REITs index
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| Amount: | $450 million, increased from $100 million
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| Maturity: | Oct. 16, 2042
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| Coupon: | Two times cash distributions that a hypothetical holder of the index’s constituents would have received during month minus accrued fees; payable monthly
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| Face amount: | $25
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| Payout at maturity: | Based on monthly compounded leveraged performance of index less accrued fees; leverage factor is two; fees include 0.4% annualized tracking rate and financing rate of Libor plus 40 bps
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| Call option: | From Oct. 17, 2016 onward
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| Initial index level: | 283.2 (index closing level on Sept. 30, 2015)
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| Initial trade date: | Oct. 8, 2015
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| Settlement date: | Oct. 19, 2015 for $37.5 million
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| Reopening date: | May 14
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| Agent: | UBS Investment Bank
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| Fees: | Varies
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| Listing: | NYSE Arca: MRRL
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| Cusip: | 90274D432
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