By Jennifer Chiou
New York, March 10 – UBS AG, London Branch priced an initial $25 million principal amount of Monthly Reset 2xLeveraged exchange-traded access securities due March 13, 2045 linked to the ISE Exclusively Homebuilders index, according to a 424B2 filing with the Securities and Exchange Commission.
The company sold the exchange-traded notes at par of $25 to underwriter UBS Securities LLC.
UBS plans to issue up to $100 million of the notes. The remainder will be sold from time to time at varying prices.
The ETNs do not pay a coupon.
The notes are putable, subject to a minimum of 50,000 notes and a redemption fee of 0.125%. The first redemption date is March 19, 2015. They are callable in whole beginning on March 14, 2016.
The notes have been approved for listing on the NYSE Arca under the symbol “HOML.”
Index
The securities provide a return linked to the total return version of the ISE Exclusively Homebuilders index, which is focused on companies that engage in the development and construction of homes and communities.
The index attempts to capture at least two-thirds of the entire homebuilding industry’s market capitalization and uses a modified market capitalization-weighted methodology, which is designed to prevent a few large stocks from dominating the index.
Payout
The payout at maturity will be the current principal amount plus 200% of the index return, which could be positive or negative, minus the accrued fees, which are a tracking fee of 0.85% per year and a financing charge of Libor plus 80 basis points.
The current principal amount is $25 until the first monthly valuation date. For each subsequent calendar month, the current principal amount is reset to the previous current principal amount plus two times the index return on the monthly valuation date minus accrued fees on the monthly valuation date.
For each month, the monthly valuation date is the last business day of the previous calendar month.
| Issuer: | UBS AG, London Branch
|
| Issue: | Monthly Reset 2xLeveraged exchange-traded access securities
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| Underlying index: | ISE Exclusively Homebuilders index
|
| Amount: | Up to $100 million
|
| Maturity: | March 13, 2045
|
| Coupon: | 0%
|
| Face amount: | $25
|
| Payout at maturity: | Current principal amount plus 200% of index return, minus tracking fee of 0.85% per year and accrued financing charge of Libor plus 80 bps
|
| Call option: | In whole beginning on March 14, 2016
|
| Put option: | At any time, subject to minimum of 50,000 notes and 0.125% redemption fee
|
| Initial closing level: | 16.93 (for calendar month)
|
| Pricing date: | March 10
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| Settlement date: | March 13 (for $25 million)
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| Underwriter: | UBS Securities LLC
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| Fees: | None
|
| Listing: | NYSE Arca: HOML
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| Cusip: | 90274P302
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