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UBS launches USD 2 billion Basel III-compliant loss-absorbing notes

Zurich/Basel Price Sensitive Information


Zurich/Basel, 22 February 2012 – UBS announced today that it is issuing USD 2 billion of subordinated loss-absorbing non-dilutive notes. The notes, which will qualify as tier 2 capital under Basel III standards and have a maturity of 10 years with an optional call at year 5, will pay a non-deferrable coupon of 7.25%. The loss absorption trigger is set at a 5% common equity ratio, with the ratio calculated under the prevailing regulatory regime, being Basel 2.5 until year end 2012, and "phased-in" Basel III thereafter until those new rules become fully applicable on 1 January, 2019.

The notes were offered in minimum denominations of USD 200,000 and were widely placed with private and institutional investors in Asia and Europe.

Group Chief Financial Officer Tom Naratil said: "Today's capital issuance represents an important step in our compliance with Basel III/ FINMA capital requirements and is a further proof point that we are delivering on our capital plans. The very competitive coupon of 7.25% for this 10-year benchmark-size offering reflects UBS's strong capital, liquidity and funding position. Today's deal marks the beginning of an issuance program as we build our loss-absorbing capital base to meet FINMA and the Basel Committee requirements for systemically important banks well in advance of the regulatory deadlines."


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