UBS AG Announces Price-Sensitive Adjustments to Keppel Certificates Amid Dividend and In-Specie Distribution

Key Highlights

• UBS AG, acting through its London Branch, will adjust the terms and conditions for two leveraged certificates related to Keppel Ltd. shares.
• The adjustment follows Keppel Ltd.’s announcement of both an ordinary cash dividend and a special dividend, which includes a dividend in-specie (distribution of Keppel REIT units).
• The Ex-Date for the dividends and in-specie distribution is set for 27 April 2026.
• These adjustments will directly affect the reference price and calculations for the leveraged certificates, which may impact their value and the trading price of Keppel Ltd. shares.

Details of the Certificates Affected

• European Style Cash Settled Long Certificates expiring on 30 July 2027, offering 5x daily leverage on Keppel Ltd. shares (Keppel 5xLongUB270730).
• European Style Cash Settled Short Certificates expiring on 31 August 2027, offering 5x daily leverage on Keppel Ltd. shares (Keppel 5xShortUB270831).

Details of the Dividend and In-Specie Distribution

• Ordinary Dividend: S\$0.19 per Keppel share (tax-exempted, cash dividend).
• Special Dividend: S\$0.02 per Keppel share (cash), plus a dividend in-specie of one (1) Keppel REIT unit for every nine (9) Keppel shares.
• The closing price of a Keppel REIT unit on 24 April 2026 will be used to value the in-specie portion.
• The Ex-Date, when Keppel shares will begin trading ex-dividend and ex-in-specie, is 27 April 2026.

Technical Adjustment: The R_factor

To reflect these distributions, UBS AG will adjust the certificates using the following formula:

    Rfactor = (S - CD - OD) / S
    

• S: Closing price of Keppel share on 24 April 2026 (S\$11.55)
• CD: Special Dividend per share (S\$0.02) plus the per-share value of the Keppel REIT unit (closing price of Keppel REIT unit on 24 April 2026 divided by 9)
• OD: Ordinary Dividend per share (S\$0.19)

Based on the specified values, the adjusted R_factor is calculated to be 0.973256. This means the certificate reference price for Keppel shares will be adjusted from S\$11.55 to S\$11.241 as of 27 April 2026.

Implications for Investors and Shareholders

• Price-Sensitive Event: The adjustment to the certificate terms will directly affect the payout and value of Keppel-linked leveraged certificates. Investors should be aware that the adjusted reference price could move the market value of these structured products.
• Potential Share Price Impact: The ex-dividend and ex-in-specie date typically cause the share price to adjust downward to reflect the value of dividends and distributions. In this case, a large in-specie dividend (distribution of Keppel REIT units) may create additional trading volatility.
• Action for Certificate Holders: Investors in the affected certificates should review their positions and understand that the daily leverage and payout calculations will use the adjusted reference price from 27 April 2026 onwards.

Summary

UBS AG’s announcement of adjustment to the leveraged certificates is both price-sensitive and significant for investors in Keppel Ltd. and the related structured products. The combination of cash dividends and a sizable in-specie distribution is expected to impact the share price and certificate values on and after 27 April 2026. Investors are advised to monitor the ex-date and review their holdings accordingly.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with their financial advisors before making investment decisions. The information provided is based on official announcements and is subject to change without notice.

View Keppel 5xShortUB270831 Historical chart here