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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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This release contains statements that constitute “forward-looking statements” as to UBS’s expectations concerning future developments. A number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from UBS’s expectations. These factors include, but are not limited to future developments in the markets in which UBS operates or to which it is exposed, the effect of possible political, legal and regulatory developments, and UBS’s ability to retain and attract the key employees. In addition, our business and financial performance could be affected by other factors identified in our past and future filings and reports, including those filed with the US Securities and Exchange Commission (SEC). More detailed information about those factors is set forth in documents furnished by UBS and filings made by UBS with the SEC, including UBS’s Annual Report on Form 20-F for the year ended 31 December 2010 as amended by Form 20-F/A filed 10 November 2011. UBS is not under any obligation to (and expressly disclaims any obligation to) update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.