UBS to price one-year capped knock-out notes linked to S&P 500

By Angela McDaniels

Tacoma, Wash., July 10 - UBS AG, London Branch plans to price 0% capped index knock-out notes due July 31, 2013 linked to the S&P 500 index, according to an FWP filing with the Securities and Exchange Commission.

A knock-out event occurs if the index's closing level is less than the initial index level by more than 23.25% on any day during the life of the notes.

If a knock-out event does not occur, the payout at maturity will be par plus the greater of the index return and 10%.

If a knock-out event occurs, the payout will be par plus the index return, with full exposure to any losses.

In each case, the payout will be subject to a maximum return of at least 10%. The exact maximum return will be set at pricing.

The notes are expected to price July 13 and settle July 18.

UBS Investment Bank is the underwriter, and J.P. Morgan Securities LLC and JPMorgan Bank NA are dealers.

The Cusip number is 902674KZ2.

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