UBS plans 0% absolute return barrier notes linked to Russell 2000

By Jennifer Chiou

New York, June 29 - UBS AG plans to price zero-coupon principal-protected absolute return barrier notes due Jan. 30, 2009 linked to the Russell 2000 index, according to an FWP filing with the Securities and Exchange Commission.

The notes are expected to price on July 26 and settle on July 31.

If the index does not close above the upper index barrier or below the lower index barrier during the life of the notes, the payout at maturity will be par of $10.00 plus the absolute value of the index's gain or decline.

If the index crosses one or both of the barriers during the life of the notes, the payout at maturity will be par.

The upper and lower index barriers will be between 26.25% and 28.75% above and below the initial index level, respectively. The exact barriers will be determined at pricing.

UBS Investment Bank and UBS Financial Services will be the underwriters and will receive a discount of 1.75%.

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