SEC form 6-K filing: Announcement by Swiss Confederation regarding conversion of UBS mandatory convertible notes and placement of shares

The Swiss Confederation (the “Confederation”) has announced its intention to exercise its right to convert all CHF 6 billion of its holding of UBS Mandatory Convertible Notes due 2011 (“MCNs”) and to place with institutional investors the newly issued UBS shares received upon conversion.

Upon conversion of the MCNs, UBS will issue 332,225,913 new shares with a nominal value of CHF 0.10 each from existing conditional capital. As a result, the share capital of UBS will increase from currently CHF 322,583,859.90 to CHF 355,806,451.20. Conversion and the capital increase are expected to take place on 25 August 2009.

Further, in connection with the conversion of the MCNs, the Confederation will waive its right to receive future coupons on the converted MCNs for a cash amount of approximately CHF 1.8 billion (the “Coupon Consideration”), representing the present value of the future coupon payments. The Coupon Consideration does not differ materially in amount from the book value of the relevant liability held in UBS’s balance sheet as at 30 June 2009. The Coupon Consideration will, therefore, have no material impact on UBS’s profit and loss account for the third quarter of 2009. However, the Coupon Consideration will reduce UBS’s regulatory capital by approximately CHF 1.4 billion.

This document does not constitute an offer of securities for sale in the United States of America. Securities described herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States of America absent registration or an exemption from registration thereunder.