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UBS launches SUPER Notes X linked to a basket of four leading Hong Kong blue-chip stocks

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UBS today launched SUPER Notes X (Series no. 10a - HKD and Series no. 10b- USD) linked to a basket of four blue-chip stocks listed in Hong Kong. The US dollar-denominated Notes have a fixed coupon for the first year of 10% and the Hong Kong dollar-denominated Notes a fixed coupon of 9% over the same period. Both tranches have a two-year tenor and mature in 2007.

In the second year, the coupon is linked to the best performing company in the basket subject to a maximum of 9% for the Hong Kong dollar Notes and 10% for the US dollar Notes.

The Notes are linked to the performance of Hong Kong-listed companies: CNOOC Ltd; HSBC Holdings plc; Hutchison Whampoa Ltd and Sun Hung Kai Properties Ltd.

On the maturity date the Notes will be redeemed in cash at 100% of the principal amount, unless the five-day average share price of the worst-performing company during the observation period - the five consecutive stock exchange business days, or 'averaging dates', ending on the stock exchange business day falling on or after the observation date which is expected to be on 18th June 2007 - is less than its conversion price. If that is the case, then the Notes will be redeemed by physical delivery of the shares in the worst performing company.

The Notes are not principal protected.

Each company had at least an 84% buy or hold analyst recommendation displayed on Bloomberg on 10th May 2005.

"The instruments would suit investors who are bullish on the share price performance of all of the equity-linked companies over their life and who are seeking a fixed-rate coupon for the first year at a relatively high yield in the current low interest rate environment," said Min PARK, Head of Equity Risk Management at UBS, Asia.

"Nevertheless, they should be comfortable with the risk that the second coupon, payable in year two, will be determined by the performance of the company which performed best as a percentage of its initial price," he added.

"Investors should also understand that if the five-day average share price of none of the four companies during the observation period is higher than its initial price, then no second coupon will be paid in year two," said Christopher F LEE, head of UBS's Equity Risk Management Intermediary desk.

The new instruments are available for subscription by retail investors in Hong Kong from 17th May until 10th June.

ABN AMRO Bank N.V. Hong Kong; Bank of China (Hong Kong); Chiyu Banking Corporation; Dah Sing Bank; Hang Seng Bank; MEVAS Bank; Nanyang Commercial Bank; Shanghai Commercial Bank; Sun Hung Kai Investment Services; Wing Hang Bank; and Wing Lung Bank are distributors.

UBS's Equity Risk Management Products team was placed first in all nine equity categories in Asiamoney's inaugural structured products poll last year. UBS was also voted Overall Best Provider in the Equity category.

Enquiries:

Mark Panday

(T) +852 2971 8221

(M) +852 9747 1990

Matthew McGrath

(T) +852 2971 8200

(M) +852 9325 0166

Donna Chan

(T) +852 2971 8792

(M) +852 9312 1311


Hong Kong, 17 May 2005
UBS