UBS has launched a consent solicitation for its Exchange Traded Access Securities (ETRACS) linked to the UBS Bloomberg Constant Maturity Commodity Index Total Return due 2038.
The securities trade on the NYSE Arca under the ticker symbol UCI.
Subject to the terms and conditions set forth in the consent solicitation statement dated 16 October 2012 and the accompanying letter of transmittal, UBS is soliciting consents to the proposed amendment of the indenture from each person in whose name securities were registered at 5:00 p.m., New York City time, on 15 October 2012, or their duly designated proxies, including persons who held securities through The Depository Trust Company as of the record date.
Pursuant to the terms of the securities, UBS has the right to redeem all, but not less than all, outstanding securities on any “trading day” on or after 4 April 2013, provided that the aggregate principal amount of the securities outstanding must be less than USD10,000,000 on the fifth trading day prior to the applicable “call settlement date”. Also, pursuant to the terms of the securities, the “fee amount” is currently an amount equal to 0.65 per cent per annum calculated on a daily basis.
The proposed amendment would give UBS the right, on or after 4 April 2013, to redeem all, but not less than all, outstanding securities, without regard to the amount of securities outstanding. If UBS receives the requisite consents to make such change to the redemption provision of the securities and enters into the supplemental indenture, then UBS will also reduce the fee amount of the securities applicable to the period beginning on the day after such supplemental indenture is entered into and continuing until the “maturity date” from an amount equal to 0.65 per cent per annum to an amount equal to 0.55 per cent per annum, calculated on a daily basis.
Under the indenture, holders must deliver (and not revoke) valid consents in respect of at least 662/3 per cent in principal amount of the outstanding securities to approve the proposed amendment.
The consent solicitation is being made pursuant to the statement and accompanying letter of transmittal, and investors should review these documents for important terms and conditions relating to the consent solicitation.
A beneficial owner of an interest in securities held through a DTC participant must properly instruct such DTC participant sufficiently in advance of 5:00 p.m., New York City Time, on 7 November 2012 (which time and date may be extended, pursuant to the terms of the statement) to cause a consent to be delivered by such DTC participant with respect to the proposed amendment.
