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UBS PaineWebber's Municipal Securities Group (MSG) Reports On Tobacco Bonds

| Media Releases Americas

UBS PaineWebber's Municipal Securities Group (MSG) Strategy Team today published an analysis of the tobacco bond market in its report The Municipal Market Strategist.

According to Brad Gewehr, UBS PaineWebber's director of municipal research, the dynamics of the market have shifted as a sharp expansion of the forward calendar for tobacco deals shows potential supply outrunning the more modest broadening of the buyer base. "This would likely create demand for added yield and threaten to re-price the market" said Gewehr. "Based on current estimates, new money issuance through the end of the year could exceed $8 billion - more than the total amount of tobacco bonds issued to date."

Additional highlights of the report include:

*CREDIT SWAPS - WHY ISSUERS USE SWAPS
*MUNICIPAL STRATEGY - THE GOING GETS TOUGHER

Produced monthly, The Municipal Market Strategist offers municipal investors a comprehensive assessment of the opportunities and risks within the municipal market. Targeted to institutional money managers, issuers of tax-exempt securities and individual investors, it considers the key issues of importance to municipal investors ranging from changes in the tax laws, to fundamental shifts in the credit outlook, to supply/demand dynamics, to the near-term cyclical outlook.

At the close of 2001, the MSG ranked number two in negotiated senior managed underwriting with a more than twelve and a half percent market share.

UBS PaineWebber serves the wealth management needs of more than 2 million clients with 8,800 financial advisors in 374 branch offices nationwide. UBS PaineWebber is one of four business groups of UBS AG along with UBS Warburg, UBS Global Asset Management and UBS Switzerland.

Contacts:

Susan Wentworth (212) 713-4097

Amy Rosenberg (212) 713-8510