Published on 7/16/2014 in the Prospect News Structured Products Daily.
New Issue: UBS prices $6.75 million contingent income autocallables tied to United Continental
By Toni Weeks
San Luis Obispo, Calif., July 16 – UBS AG, London Branch priced $6.75 million of contingent income autocallable securities with step-down call threshold levels due July 19, 2017 linked to United Continental Holdings Inc. shares, according to a 424B2 filing with the Securities and Exchange Commission.
The notes will pay a contingent quarterly payment at an annualized rate of 16.4% if United Continental stock closes at or above the 75% downside threshold level on the determination date for that quarter.
If the shares close at or above the call threshold level on any of the first 11 quarterly determination dates, the notes will be called at par plus the contingent coupon. The call threshold level is initially 95% of the initial price for the first year, stepping down to 90% of the initial price on July 14, 2015 and to 85% of the initial price on July 14, 2016.
If the notes are not called and United Continental stock finishes at or above the downside threshold level, the payout at maturity will be par plus the contingent payment.
Otherwise, investors will receive a number of shares of United Continental stock equal to $10 divided by the initial stock price or, at the issuer’s option, the cash value of those shares.
UBS Securities LLC will be the agent. Morgan Stanley Smith Barney LLC will handle distribution.
| Issuer: | UBS AG, London Branch
|
| Issue: | Contingent income autocallable securities
|
| Underlying stock: | United Continental Holdings Inc. (Symbol: UAL)
|
| Amount: | $6,751,500
|
| Maturity: | July 19, 2017
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| Contingent payment: | If United Continental shares close at or above downside threshold on quarterly determination date, $0.41 per note; otherwise, no contingent payment for that period
|
| Price: | Par of $10.00
|
| Payout at maturity: | If final share price is greater than or equal to downside threshold, par plus the coupon; if final share price is less than downside threshold, a number of United Continental shares equal to $10 divided by initial stock price or, at issuer’s option, equivalent value in cash
|
| Call: | Automatically at par plus coupon if closing share price is greater than or equal to call threshold level on any of first 11 quarterly determination dates
|
| Initial share price: $44.92
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| Downside threshold: | $33.69, 75% of initial share price
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| Call thresholds: | $42.67, 95% of initial price for the first year, stepping down to $40.43, or 90% of initial price on July 14, 2015 and to $38.18, or 85% of initial price, on July 14, 2016
|
| Pricing date: | July 14
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| Settlement date: | July 17
|
| Agent: | UBS Securities LLC
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| Distribution: | Morgan Stanley Smith Barney LLC
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| Fees: | 2.25%
|
| Cusip: | 90273E480
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