UBS to price performance tracking securities linked to UBS Return Optimization

By Laura Lutz

Des Moines, Dec. 6 - UBS AG plans to price 0% performance tracking securities due Dec. 31, 2012 linked to the UBS Return Optimization index, according to an FWP filing with the Securities and Exchange Commission.

The index combines total-return exposure to the S&P 500 index with a hypothetical call-spread strategy.

Investors may exchange all or a portion of their securities on any anniversary of the settlement date. The redemption amount will be calculated in the same way as the payout at maturity.

If the notes are not exchanged early, the payout at maturity will be 98.75% of par plus the index return and minus a fee amount. The fee amount will initially be 1.25% and will increase each day by an amount equal to $9.875 plus the index return for that day multiplied by the quotient of 1.5% divided by 365.

Pricing is expected on Dec. 21 and settlement on Dec. 31.

UBS Financial Services Inc. and UBS Investment Bank are the underwriters.

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