Skip to main content

UBS Announces Final Results of Five ETRACS ETN Exchange Offers and Suspends Further Sales of the Five Series A ETNs

UBS AG announced today the final results of its previously announced voluntary exchange offers (“Exchange Offers”) for five ETRACS Series A ETNs (collectively the “Series A ETNs”) for corresponding ETRACS Series B ETNs (collectively, the “Series B ETNs”), as set forth Table-1 below. As of 4:59 p.m. (New York City time) on August 5, 2020 (the “Final Expiration Date”), the aggregate principal amounts listed below of Series A ETNs had been validly tendered and not validly withdrawn in connection with the exchange offers. Holders that validly tendered and did not withdraw their Series A ETNs between 5:00 p.m. (New York City time) on July 21, 2020 and the Final Expiration Date will settle their exchanges on August 7, 2020.

Table-1

ETRACS Series A ETN
(Ticker | Name)

ETRACS Series B ETN
(Ticker | Name)

Aggregate Stated Principal
Amount Validly Tendered as
of the Expiration Date

AMU

ETRACS Alerian MLP Index ETN due July 18, 2042

AMUB

ETRACS Alerian MLP Index ETN, Series B due July 18, 2042

$229,740,525

BDCS

ETRACS Linked to the Wells Fargo Business Development Company Index due April 26, 2041

BDCZ

ETRACS Wells Fargo Business Development Company Index ETN Series B due April 26, 2041

$42,839,625

DJCI

ETRACS Linked to the Bloomberg Commodity Index Total Return due October 31, 2039

DJCB

ETRACS Bloomberg Commodity Index Total Return ETN Series B due October 31, 2039

$36,842,900

MLPI

ETRACS Linked to the Alerian MLP Infrastructure Index due April 2, 2040

MLPB

ETRACS Alerian MLP Infrastructure Index ETN Series B due April 2, 2040

$473,391,775

UCI

ETRACS linked to the UBS Bloomberg Constant Maturity Commodity Index (CMCI) Total Return due April 5, 2038

UCIB

ETRACS UBS Bloomberg Constant Maturity Commodity Index (CMCI) Total Return ETN Series B due April 5, 2038

$15,427,325

As previously announced, the voluntary exchange offers with respect to UBS AG’s 2×Leveraged Long ETRACS Linked to the Wells Fargo® Business Development Company Index due May 24, 2041 (Ticker: BDCL) (CUSIP: 90267B765) and ETRACS Monthly Pay 2xLeveraged Mortgage REIT ETN due October 16, 2042 (Ticker: MORL) (CUSIP: 90269A302) were each terminated effective as of March 16, 2020, as a result of the mandatory redemption of those securities following the occurrence of an “Acceleration Upon Minimum Indicative Value” on March 16, 2020, each pursuant to its terms. The voluntary exchange offer with respect to the ETRACS Monthly Pay 2xLeveraged Closed-End Fund ETN due December 10, 2043 (Ticker: CEFL) (CUSIP: 90270L842), was terminated effective as of March 18, 2020, as a result of its mandatory redemption following the occurrence of an “Acceleration Upon Minimum Indicative Value” on March 18, 2020, pursuant to its terms.

Each Series B ETN that was offered in the Exchange Offers is intended to provide the same economic exposure as the corresponding Series A ETN, including identical underlying indices, daily Closing Indicative Values (CIV), investor fees, coupon amounts (if applicable) and payment formulas, in each case as set forth in the Prospectus and applicable annex related to the Exchange Offers, dated December 9, 2019 (the “Prospectus”). The key difference between the Series A ETNs and the Series B ETNs is that UBS AG and UBS Switzerland AG are each co-obligors on all Series A ETNs, while UBS AG is the sole issuer and obligor on all Series B ETNs. UBS Switzerland AG has no obligations with respect to the Series B ETNs.

UBS AG conducted the Exchange Offers in order to reduce the intercompany exposures of UBS Switzerland AG to UBS AG in line with regulatory recovery and resolution guidance.

For more information on the ETNs that were included in the Exchange Offers, please see the Prospectus.

Table-2 below includes the CUSIPs for each ETN involved in the Exchange Offers.

Table-2

ETRACS Series A ETN

(Ticker | CUSIP)

ETRACS Series B ETN

(Ticker | CUSIP)

AMU

90267B682

AMUB

90274D374

BDCS

902641588

BDCZ

90274D416

DJCI

902641679

DJCB

90269A450

MLPI

902641646

MLPB

90274D382

UCI

902641778

UCIB

90274D390

Series A ETNs Redemption and Suspension of Future Sales

UBS AG also announced today that it has suspended further sales from inventory of each of the Series A ETNs listed in Table-1 above. In addition, UBS AG announced a waiver of the minimum early redemption size for each series of ETNs specified in Table-1 above. Currently, holders of the ETNs are required to redeem at least 50,000 ETNs at one time in order to exercise their right to redeem the ETNs directly with the Issuer.

UBS AG has a contractual right to redeem all Series A ETNs and UBS AG intends to exercise its contractual call right for any non-tendered Series A ETNs that were subject to the Exchange Offers within the next few months. UBS AG plans to issue another press release next month with details concerning the redemption dates and process for these Series A ETNs. Following the completion of such redemptions, no Series A ETNs that were subject to the exchange offers are expected to remain outstanding.

As disclosed in more detail in the prospectus supplements for each of the Series A ETNs, the market value of the Series A ETNs may be influenced by, among other things, supply and demand for the Series A ETNs. There is a substantial possibility that the suspension of any further sales of these Series A ETNs by UBS AG, as described above, may influence the market value of the Series A ETNs and the liquidity of the market for the Series A ETNs, potentially leading to insufficient supply and causing the Series A ETNs to trade at a premium above their closing or intraday indicative value. Any such premium may subsequently decrease at any time and for any reason without warning, resulting in financial loss to investors who paid this premium when they acquired their Series A ETNs. In addition, on the applicable redemption date, holders will receive the Redemption Amount or Call Settlement Amount, as applicable, as described in each applicable prospectus supplement but will not receive any premium thereto. Accordingly, investors who purchase the Series A ETNs at any time prior to the Call Settlement Date for an amount that is greater than the Redemption Amount or Call Settlement Amount, as applicable, (including paying any premium to the indicative value of the Series A ETNs) will suffer a loss on their investment.

If investors elect to redeem their Series A ETNs prior to the Call Settlement Date, any redemption will be at the redemption value set forth in the applicable prospectus supplement and will not include any premium above that value. Investors should always consult their financial advisors and compare the intraday indicative value of the Series A ETNs with the Series A ETNs’ then-prevailing market price before purchasing or selling the Series A ETNs, especially Series A ETNs with premium characteristics.

This announcement does not affect the terms of the outstanding Series A ETNs, including the right of holders to require UBS AG to redeem their Series A ETNs on the terms and at the redemption price set forth in the applicable prospectus supplement.

For more information regarding the Series A ETNs, the prospectus supplement for each of the Series A ETNs can be accessed on EDGAR, the Securities and Exchange Commission’s (“SEC”) website, at www.sec.gov, and the prospectus supplements are also available at the links included in Table-3 below.

Table-3

ETRACS Series A ETN

(Ticker | CUSIP)

Link to Prospectus Supplement

AMU

90267B682

Link

BDCS

902641588

Link

DJCI

902641679

Link

MLPI

902641646

Link

UCI

902641778

Link

The Exchange Offers were made pursuant to the terms and conditions set forth in UBS AG’s Prospectus related to the Exchange Offers, dated December 9, 2019, which form a part of the Registration Statement (as defined below), and the related Letter of Instruction (the “Letter of Instruction”).

A Registration Statement on Form F-4 (Registration No. 333-234705) (the “Registration Statement”) relating to the offer of the Series B ETNs was filed with the SEC on November 14, 2019 (as amended by Amendment No. 1 to the Registration Statement filed with the SEC on December 5, 2019) and declared effective by the SEC on December 9, 2019. Copies of the Prospectus, the Letter of Instruction and other documents filed with the SEC by UBS AG are available to holders free of charge through the website maintained by the SEC at www.sec.gov. Copies of the Prospectus and the Letter of Instruction are available to holders free of charge through the information agent, D.F. King & Co. Inc., by calling (800) 591-8269 (toll free) or (212) 269-5550 (for banks and brokers) or by emailing ubs@dfking.com. Holders may also obtain copies of the Prospectus and the Letter of Instruction, free of charge, by contacting UBS AG by calling 1-877-387 2275 or by emailing etracs@ubs.com.

UBS has also filed a Registration Statement on Form F-3 (Registration No. 333-225551) including a prospectus and supplements thereto with the SEC for the general offering of Series A ETNs and other exchange-traded securities, outside of the exchange offers. Before you invest, you should read the prospectus, along with the applicable prospectus supplements to understand fully the terms of the securities and other considerations that are important in making a decision about investing in the Series A ETNs. The applicable offering documents for each Series A ETN that is the subject of this communication may be obtained by clicking on the links above in Table-3. You may also get these documents without cost by visiting EDGAR on the SEC website at www.sec.gov.

This news release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities that are part of the Exchange Offers. The Exchange Offers are being made solely pursuant to the terms and conditions described in the Prospectus and related annexes and Letter of Instruction. This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor will there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS

Information set forth in this news release contains forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially. A discussion of factors that may affect future results is contained in UBS AG’s filings with the Securities and Exchange Commission and in the Registration Statement related to the Exchange Offers and there is no assurance that UBS AG will actually complete the Exchange Offers on the terms described herein or at all or that it will subsequently redeem the Series A ETNs. UBS disclaims any obligation to update or revise statements contained in this news release based on new information or otherwise.

In the U.S., securities underwriting, trading and brokerage activities and M&A advisor activities are provided by UBS Securities LLC, a registered broker/dealer that is a wholly owned subsidiary of UBS AG, a member of the New York Stock Exchange and other principal exchanges, and a member of SIPC. UBS Financial Services Inc. is a registered broker/dealer and affiliate of UBS Securities LLC.

The securities related to the offerings are not deposit liabilities and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency of the United States, Switzerland or any other jurisdiction.

About ETRACS

ETRACS ETNs are senior unsecured notes issued by UBS AG, are traded on NYSE Arca, and can be bought and sold through a broker or financial advisor. An investment in ETRACS ETNs is subject to a number of risks, including the risk of loss of some or all of the investor’s principal, and is subject to the creditworthiness of UBS AG. Investors are not guaranteed any coupon or distribution amount under the ETNs. Prior to making an investment in the ETRACS ETNs, investors should take into account whether or not the market price is tracking the intraday indicative value of the ETNs. We urge you to read the more detailed explanation of risks described under “Risk Factors” in the applicable prospectus supplement, or product supplement and pricing supplement, for the ETRACS ETN.

About UBS

UBS provides financial advice and solutions to wealthy, institutional and corporate clients worldwide, as well as private clients in Switzerland. UBS's strategy is centered on our leading global wealth management business and our premier universal bank in Switzerland, enhanced by Asset Management and the Investment Bank. The bank focuses on businesses that have a strong competitive position in their targeted markets, are capital efficient, and have an attractive long-term structural growth or profitability outlook.

UBS is present in all major financial centers worldwide. It has offices in more than 50 regions and locations, with about 31% of its employees working in the Americas, 32% in Switzerland, 19% in the rest of Europe, the Middle East and Africa and 18% in Asia Pacific. UBS Group AG employs over 67,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).

This material is issued by UBS AG and/or any of its subsidiaries and/or any of its affiliates ("UBS"). Products and services mentioned in this material may not be available for residents of certain jurisdictions. Past performance is not necessarily indicative of future results. Please consult the restrictions relating to the product or service in question for further information. Activities with respect to US securities are conducted through UBS Securities LLC, a US broker/dealer. Member of SIPC (http://www.sipc.org/).

Alerian MLP Index, Alerian MLP Infrastructure Index, AMZ and AMZI are trademarks of Alerian and their use is granted under a license from Alerian.

Wells Fargo Securities, Wells Fargo Securities, LLC, Wells Fargo and Wells Fargo Business Development Company Index are trademarks of Wells Fargo® & Company and have been licensed for use by UBS AG. The ETRACS Linked to the Wells Fargo Business Development Company Index and the ETRACS Wells Fargo Business Development Company Index ETN Series B are not issued, guaranteed, sponsored, or advised by Wells Fargo & Company, Wells Fargo Securities, LLC or their subsidiaries and affiliates (collectively, "Wells Fargo"). Wells Fargo makes no representation or warranty, express or implied, to investors in the ETRACS ETNs or any member of the public regarding the ability of any data supplied by Wells Fargo or any Index to track financial instruments comprising the Index or any trading market and no guarantee of performance of the ETRACS Linked to the Wells Fargo Business Development Company Index or the ETRACS Wells Fargo Business Development Company Index ETN Series B. Wells Fargo & Company does not guarantee that the Index referenced by the ETRACS ETNs has been accurately calculated and shall not have any liability for any error in the calculation. Wells Fargo's only relationship to UBS AG is the licensing of certain intellectual property rights relating to the Index as well as trademarks and trade names of Wells Fargo and of the data supplied by Wells Fargo that is determined, composed, compiled and calculated by Wells Fargo or a third party index calculator, without regard to the ETRACS Linked to the Wells Fargo Business Development Company Index or the ETRACS Wells Fargo Business Development Company Index ETN Series B. Wells Fargo has no obligation to take into consideration the ETRACS Linked to the Wells Fargo Business Development Company Index and the ETRACS Wells Fargo Business Development Company Index ETN Series B or investors in the ETRACS ETNs when determining, composing, compiling or calculating the data. Wells Fargo has no obligation or liability in connection with the issuance, listing, registration, distribution, administration, trading or redemption or settlement by the issuer or otherwise of the ETRACS Linked to the Wells Fargo Business Development Company Index and the ETRACS Wells Fargo Business Development Company Index ETN Series B .

WELLS FARGO DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE INDEX OR OF ANY DATA SUPPLIED BY IT OR ANY DATA INCLUDED THEREIN. WELLS FARGO MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY UBS AG AND THE ETRACS WELLS FARGO BUSINESS DEVELOPMENT COMPANY INDEX OR ANY OTHER PERSON OR ENTITY FROM THE USE OF INDEX OR OF THE DATA SUPPLIED BY WELLS FARGO OR ANY DATA INCLUDED THEREIN. WELLS FARGO MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE INDEX AND THE DATA SUPPLIED BY WELLS FARGO OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL WELLS FARGO HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

NONE OF BLOOMBERG, UBS AG, UBS SECURITIES LLC OR ANY OF THEIR SUBSIDIARIES OR AFFILIATES GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE BLOOMBERG COMMODITY INDEXSM OR THE UBS BLOOMBERG CONSTANT MATURITY COMMODITY INDEX (CMCI) OR ANY DATA RELATED THERETO AND NONE OF BLOOMBERG, UBS AG, UBS SECURITIES LLC OR ANY OF THEIR SUBSIDIARIES OR AFFILIATES SHALL HAVE ANY LIABILITY FOR ANY ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN. NONE OF BLOOMBERG, UBS AG, UBS SECURITIES OR ANY OF THEIR SUBSIDIARIES OR AFFILIATES MAKES ANY WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY OWNERS OF THE SECURITIES OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE BLOOMBERG COMMODITY INDEXSM OR ANY DATA RELATED THERETO. NONE OF BLOOMBERG, UBS AG, UBS SECURITIES LLC OR ANY OF THEIR SUBSIDIARIES OR AFFILIATES MAKES ANY EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE BLOOMBERG COMMODITY INDEXSM OR THE UBS BLOOMBERG CONSTANT MATURITY COMMODITY INDEX (CMCI) OR ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, TO THE MAXIMUM EXTENT ALLOWED BY LAW, BLOOMBERG, ITS LICENSORS (INCLUDING UBS), AND ITS AND THEIR RESPECTIVE EMPLOYEES, CONTRACTORS, AGENTS, SUPPLIERS AND VENDORS SHALL HAVE NO LIABILITY OR RESPONSIBILITY WHATSOEVER FOR ANY INJURY OR DAMAGES— WHETHER DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR OTHERWISE—ARISING IN CONNECTION WITH THE BLOOMBERG COMMODITY INDEXSM OR THE UBS BLOOMBERG CONSTANT MATURITY COMMODITY INDEX CMCI OR ANY DATA OR VALUES RELATING THERETO—WHETHER ARISING FROM THEIR NEGLIGENCE OR OTHERWISE, EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS AMONG BLOOMBERG AND UBS SECURITIES LLC, OTHER THAN UBS AG.

UBS specifically prohibits the redistribution or reproduction of this material in whole or in part without the prior written permission of UBS and UBS accepts no liability whatsoever for the actions of third parties in this respect.

© UBS 2020. The key symbol, UBS and ETRACS are among the registered and unregistered trademarks of UBS. Other marks may be trademarks of their respective owners. All rights reserved.


1 Individual investors should instruct their broker/advisor/custodian to call us or should call together with their broker/advisor/custodian.

Contacts:

Media contact
Christina Aquilina
+1 212 713 4488
Christina.aquilina@ubs.com

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.