On 22 February 2012, UBS AG announced the issuance of USD 2 billion 7.25% Tier 2 subordinated notes with a maturity of 10 years (Notes). The Notes constitute a novel loss-absorbing instrument, providing for a full write-down if UBS AG’s CET 1 capital falls below 5% of its risk-weighted assets, and qualify both as tier 2 capital under Basel III standards and as progressive capital component under the new Swiss capital adequacy rules.

Reference: CapLaw-2012-17