NEW YORK--(BUSINESS WIRE)--Jul. 15, 2008
UBS (NYSE: UBS) today announced it is actively developing a structure
that would offer to purchase any and all auction preferred stock issued
by registered closed-end tax-exempt funds and held by eligible UBS
advisory and brokerage clients in their UBS accounts. If this structure
is implemented and the offer is consummated, UBS clients who accept the
offer will receive cash in an amount equal to the liquidation preference
of their auction preferred stock plus any accrued and unpaid dividends
(which is the amount they would receive if auctions for these securities
were clearing). Implementation will be subject to a number of
transactional structuring factors, including compliance with all
applicable legal requirements. In order to be eligible for this offer,
the auction preferred stock must have been held in the client’s
UBS account on July 15, 2008.
These offers, if consummated, are intended to be financed by the net
proceeds of remarketed preferred securities to be issued in one or more
private placements by a newly-created Trust. This Trust will be
controlled by UBS and will be consolidated in UBS's consolidated
financial statements. The Trust Preferred will pay a dividend rate that
will reset based on weekly remarketings performed by a designated
remarketing agent. The Trust Preferred will be supported by a Liquidity
Put or similar demand feature provided by UBS or another highly rated
bank. It is anticipated that the Trust Preferred and the accompanying
Liquidity Puts will be eligible for investment by money market funds.
Auction preferred stock is a preferred equity security that pays
dividends that are reset by an auction typically held every seven or 28
days. These auctions have consistently been failing since February 2008.
Consequently, many holders desiring to sell these securities, including
UBS clients, have been unable to do so, although dividends continue to
be paid at pre-determined maximum rates. On July 15, 2008, UBS clients
held an aggregate of approximately $3.5 billion of auction preferred
stock issued by registered closed-end tax-exempt funds in their UBS
accounts (valued at liquidation preference).
The proposed structure, and the proposed offer to UBS’s
clients, are intended to be fully supportive of ongoing industry efforts
to resolve liquidity issues regarding auction preferred stock.
UBS clients who elect not to sell their auction preferred stock in the
proposed offer would retain their ability to sell in connection with
implementation of any prospective industry proposals referred to above,
as part of any redemptions by the issuing funds or in secondary market
transactions. However, there can be no assurance when, or if, any of
these alternatives will be available to holders of auction preferred
stock.
UBS has been working on developing the proposed structure for several
months. Implementation is subject to a number of factors, including
compliance with all applicable legal requirements. UBS has sought and
obtained guidance from the Department of the Treasury as to certain tax
considerations. In addition, UBS is engaged in substantive on-going
discussions with the staff of the Securities and Exchange Commission
regarding certain aspects of the proposed structure, and has recently
met with the staff to discuss its request for regulatory guidance. UBS
expects that offers to purchase the auction preferred stock from its
clients will commence within approximately 30 days of resolving these
regulatory issues. However, there can be no assurance that these
regulatory issues will be resolved.
This announcement is not an offer to purchase auction preferred stock
from any holder thereof. Any such offer will be made only to UBS clients
and only by a delivery of a document to the UBS clients containing
detailed descriptions of the terms and conditions of the offer. If made,
acceptance of that offer will be subject to compliance with the terms
and conditions set forth in the offer documentation.
The Trust Preferred Securities and related Liquidity Puts will not be
registered under the Securities Act of 1933 or any state securities
laws, and will not be able to be offered or sold in the United States
absent such registration or the perfection of an exemption therefrom.
This announcement is neither an offer to sell nor a solicitation of an
offer to buy any of these securities.
Forward-Looking Statements
This announcement may contain statements that constitute “forward-looking
statements,” including but not limited to
statements relating to UBS’s intention to
implement the proposed structure described herein. While these
forward-looking statements represent UBS's judgments, current intentions
and future expectations, a number of risks, uncertainties and other
important factors could cause actual developments to differ materially
from UBS’s expectations. These factors
include, but are not limited to: (1) the need to obtain any necessary
regulatory approvals for the implementation of the proposed structure;
(2) legislative, governmental and regulatory developments; (3) factors
affecting UBS’s estimate of the timing
necessary to implement the proposed structure; and (4) market and
macro-economic developments. UBS is not under any obligation to (and
expressly disclaims any such obligation to) update or alter its
forward-looking statements, whether as a result of new information,
future events, or otherwise.
UBS is one of the world’s leading financial
firms, serving a discerning international client base. Its business,
global in scale, is focused on growth. As an integrated firm, UBS
creates added value for clients by drawing on the combined resources and
expertise of all its businesses.
UBS is the leading global wealth manager, a leading global investment
banking and securities firm, and one of the largest global asset
managers. In Switzerland, UBS is the market leader in retail and
commercial banking.
UBS is present in all major financial centers worldwide. It has offices
in 50 countries, with about 38% of its employees working in the
Americas, 33% in Switzerland, 16% in the rest of Europe and 13% in Asia
Pacific. UBS employs more than 80,000 people around the world. Its
shares are listed on the Swiss Stock Exchange (SWX), the New York Stock
Exchange (NYSE) and the Tokyo Stock Exchange (TSE).
CONTACT: UBS AGKarina Byrne
212-882-5692
Karina.byrne@ubs.com
or
Kris Kagel, 212-882-5691
Kris.kagel@ubs.com
or
www.ubs.com
UBS (NYSE: UBS) today announced it is actively developing a structure
that would offer to purchase any and all auction preferred stock issued
by registered closed-end tax-exempt funds and held by eligible UBS
advisory and brokerage clients in their UBS accounts. If this structure
is implemented and the offer is consummated, UBS clients who accept the
offer will receive cash in an amount equal to the liquidation preference
of their auction preferred stock plus any accrued and unpaid dividends
(which is the amount they would receive if auctions for these securities
were clearing). Implementation will be subject to a number of
transactional structuring factors, including compliance with all
applicable legal requirements. In order to be eligible for this offer,
the auction preferred stock must have been held in the client’s
UBS account on July 15, 2008.
These offers, if consummated, are intended to be financed by the net
proceeds of remarketed preferred securities to be issued in one or more
private placements by a newly-created Trust. This Trust will be
controlled by UBS and will be consolidated in UBS's consolidated
financial statements. The Trust Preferred will pay a dividend rate that
will reset based on weekly remarketings performed by a designated
remarketing agent. The Trust Preferred will be supported by a Liquidity
Put or similar demand feature provided by UBS or another highly rated
bank. It is anticipated that the Trust Preferred and the accompanying
Liquidity Puts will be eligible for investment by money market funds.
Auction preferred stock is a preferred equity security that pays
dividends that are reset by an auction typically held every seven or 28
days. These auctions have consistently been failing since February 2008.
Consequently, many holders desiring to sell these securities, including
UBS clients, have been unable to do so, although dividends continue to
be paid at pre-determined maximum rates. On July 15, 2008, UBS clients
held an aggregate of approximately $3.5 billion of auction preferred
stock issued by registered closed-end tax-exempt funds in their UBS
accounts (valued at liquidation preference).
The proposed structure, and the proposed offer to UBS’s
clients, are intended to be fully supportive of ongoing industry efforts
to resolve liquidity issues regarding auction preferred stock.
UBS clients who elect not to sell their auction preferred stock in the
proposed offer would retain their ability to sell in connection with
implementation of any prospective industry proposals referred to above,
as part of any redemptions by the issuing funds or in secondary market
transactions. However, there can be no assurance when, or if, any of
these alternatives will be available to holders of auction preferred
stock.
UBS has been working on developing the proposed structure for several
months. Implementation is subject to a number of factors, including
compliance with all applicable legal requirements. UBS has sought and
obtained guidance from the Department of the Treasury as to certain tax
considerations. In addition, UBS is engaged in substantive on-going
discussions with the staff of the Securities and Exchange Commission
regarding certain aspects of the proposed structure, and has recently
met with the staff to discuss its request for regulatory guidance. UBS
expects that offers to purchase the auction preferred stock from its
clients will commence within approximately 30 days of resolving these
regulatory issues. However, there can be no assurance that these
regulatory issues will be resolved.
This announcement is not an offer to purchase auction preferred stock
from any holder thereof. Any such offer will be made only to UBS clients
and only by a delivery of a document to the UBS clients containing
detailed descriptions of the terms and conditions of the offer. If made,
acceptance of that offer will be subject to compliance with the terms
and conditions set forth in the offer documentation.
The Trust Preferred Securities and related Liquidity Puts will not be
registered under the Securities Act of 1933 or any state securities
laws, and will not be able to be offered or sold in the United States
absent such registration or the perfection of an exemption therefrom.
This announcement is neither an offer to sell nor a solicitation of an
offer to buy any of these securities.
Forward-Looking Statements
This announcement may contain statements that constitute “forward-looking
statements,” including but not limited to
statements relating to UBS’s intention to
implement the proposed structure described herein. While these
forward-looking statements represent UBS's judgments, current intentions
and future expectations, a number of risks, uncertainties and other
important factors could cause actual developments to differ materially
from UBS’s expectations. These factors
include, but are not limited to: (1) the need to obtain any necessary
regulatory approvals for the implementation of the proposed structure;
(2) legislative, governmental and regulatory developments; (3) factors
affecting UBS’s estimate of the timing
necessary to implement the proposed structure; and (4) market and
macro-economic developments. UBS is not under any obligation to (and
expressly disclaims any such obligation to) update or alter its
forward-looking statements, whether as a result of new information,
future events, or otherwise.
UBS is one of the world’s leading financial
firms, serving a discerning international client base. Its business,
global in scale, is focused on growth. As an integrated firm, UBS
creates added value for clients by drawing on the combined resources and
expertise of all its businesses.
UBS is the leading global wealth manager, a leading global investment
banking and securities firm, and one of the largest global asset
managers. In Switzerland, UBS is the market leader in retail and
commercial banking.
UBS is present in all major financial centers worldwide. It has offices
in 50 countries, with about 38% of its employees working in the
Americas, 33% in Switzerland, 16% in the rest of Europe and 13% in Asia
Pacific. UBS employs more than 80,000 people around the world. Its
shares are listed on the Swiss Stock Exchange (SWX), the New York Stock
Exchange (NYSE) and the Tokyo Stock Exchange (TSE).
CONTACT: UBS AGKarina Byrne
212-882-5692
Karina.byrne@ubs.com
or
Kris Kagel, 212-882-5691
Kris.kagel@ubs.com
or
www.ubs.com