How Premier Variable Credit Lines Work
Interest rates are set competitively using the prevailing 30-day London Interbank Offered Rate (LIBOR) as the reference rate, which may fluctuate daily. So long as adequate collateral is maintained in your collateral account, your required monthly interest charges will be added to the principal amount outstanding on your loan at the end of each month's billing cycle.
If the required collateral value is not maintained, UBS Bank USA can require you to post additional collateral, repay part or all of your loan, and/or sell your securities. Failure to promptly meet a request for additional collateral or repayment or other circumstances (e.g., a rapidly declining market) could cause UBS Bank USA to liquidate some or all of the collateral supporting the Premier Variable Credit Line. Any required liquidations may interrupt your long-term investment strategies and may result in adverse tax consequences.
Neither UBS Bank USA nor UBS Financial Services Inc. provides legal or tax advice. You should consult your legal and tax advisors regarding the legal and tax implications of borrowing using securities as collateral for a loan. For a full discussion of the risks associated with borrowing using securities as collateral, please review the Loan Disclosure Statement that will be included in your application package.