UBS to print USD2bn Tier 2 issue at 7.25% - lead

LONDON, Feb 15 (IFR) - UBS's 10-year non-call five Tier 2 loss-absorbing capital notes will be worth USD2bn and price in line with the revised coupon guidance of 7.25%, a lead on the deal said on Wednesday.

By the time the order book had closed, it had reached USD5.5bn, courtesy of more than 400 accounts, a banker on the trade added.

Around 70% of the demand has come from retail/private banks investors with the reminder coming from institutional accounts.

Asia has made a strong show with an estimated 60% of the demand coming from there. Europe made up the rest.

UBS is global coordinator. BNP Paribas, Commerzbank, Deutsche Bank and Societe Generale are joint-bookrunners on the dollar-denominated issue.

The bond is the first European Tier 2 issue where bondholders could lose all principal via permanent write-down rather than the notes converting into equity.

Under the terms of the deal, the bonds can be written down permanently if the bank's common equity Tier 1 ratio falls below 5% or is considered non-viable. UBS's Tier 1 capital ratio under Basel 2.5 stands at 16%.