UBS Announces Adjustments to Keppel Ltd. 5x Leverage Certificates Due to Dividends

Key Points Investors Must Know

• UBS AG has announced proposed adjustments to the terms of its European Style Cash Settled Long and Short Certificates with 5x daily leverage, both linked to Keppel Ltd. shares.
• The adjustments are being made in response to Keppel Ltd.’s recent declaration of both an ordinary cash dividend and a special dividend, which includes both a cash and an in-specie component.
• These changes are likely to have a direct impact on the pricing and settlement of the affected leveraged certificates, and therefore may be price-sensitive and affect the value of the certificates and potentially Keppel’s shares.

Details of the Announcement

UBS AG (acting through its London branch) has notified investors holding the following instruments that adjustments will be made due to dividend actions by Keppel Ltd.:

• European Style Cash Settled Long Certificates expiring on 30 July 2027 (Keppel 5xLongUB270730).
• European Style Cash Settled Short Certificates expiring on 31 August 2027 (Keppel 5xShortUB270831).

Keppel Ltd. Dividend Details

Keppel Ltd. has announced two dividend events:

• Ordinary Cash Dividend: S\$0.19 per share (tax-exempted).
• Special Dividend: Comprises a cash dividend of S\$0.02 per share and a dividend in-specie of one (1) Keppel REIT (KREIT) unit for every nine (9) Keppel shares held.

The ex-dividend date for these distributions is expected to be 27 April 2026. The dividend in-specie means that for every 9 Keppel shares owned, shareholders will receive 1 KREIT unit.

Certificate Adjustment Mechanism

To account for the declared distributions, UBS will adjust the terms of the relevant certificates as follows:

• The adjustment factor, known as Rfactor_t, will be calculated using the formula:
  Rfactort = (S - CD - OD) / S
  • S: Closing price of Keppel share on the last trading day prior to ex-date (24 April 2026).
  • CD (Special Dividend): S\$0.02 plus the per-share value of the KREIT unit (KREIT’s closing price on 24 April 2026 divided by 9).
  • OD (Ordinary Dividend): S\$0.19 per share.
• The Rfactor_t will be rounded to six decimal places.
• If the announced dividends are not implemented by Keppel Ltd., no adjustment will be made.
• The adjustments will take effect from the ex-date, expected to be 27 April 2026.

Potential Impact and Price Sensitivity

This adjustment is highly relevant for investors holding the affected certificates and potentially for Keppel Ltd. shareholders. Dividend payments, especially those including an in-specie distribution, often result in a price adjustment of the underlying shares. The delivery of KREIT units as part of the dividend could impact both Keppel and KREIT share prices, as investors may adjust their positions accordingly.

• Holders of the leveraged certificates must be aware that the certificate valuations will be adjusted to reflect the ex-dividend price.
• The market price of Keppel shares may decline by an amount close to the total value of the dividends (S\$0.21 plus the value of KREIT units per 9 shares) on the ex-dividend date.
• These events could trigger increased trading activity and volatility in both Keppel Ltd. and Keppel REIT around the ex-dividend date.

What Should Shareholders and Certificate Holders Do?

• Review your current holdings in both Keppel Ltd. and the relevant leveraged certificates.
• Be aware of the ex-dividend date (27 April 2026) and the likely adjustment to share and certificate prices on that date.
• Consider the impact of receiving KREIT units as part of the dividend, which may require action if you wish to consolidate or sell fractional holdings.
• Monitor official announcements from Keppel Ltd. and UBS AG for final dividend implementation and adjustment ratios.

Disclaimer: This article is for informational purposes only and should not be taken as investment advice. Investors should consult their financial advisors before making any investment decisions. The information is based on official announcements from UBS AG and Keppel Ltd. as of April 2026 and may be subject to change. Market conditions and individual circumstances may vary.

View Keppel 5xShortUB270831 Historical chart here