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Supplemental Underwriting Information |
We have agreed to indemnify UBS and JPMS against liabilities under
the Securities Act of 1933, as amended, or to contribute to payments
that UBS may be required to make relating to these liabilities as
described in the prospectus supplement and the prospectus. We will
agree that UBS may sell all or a part of the Securities that it
purchases from us to the public or its affiliates at the price to
public indicated on the cover hereof.
Subject to regulatory constraints, JPMS intends to offer to purchase
the Securities in the secondary market, but it is not required
to do so.
We or our affiliates may enter into swap agreements or related hedge
transactions with one of our other affiliates or unaffiliated
counterparties in connection with the sale of the Securities, and
JPMS and/or an affiliate may earn additional income as a result of
payments pursuant to the swap or related hedge transactions. See
"Supplemental Use of Proceeds" in this free writing prospectus and
"Use of Proceeds and Hedging" beginning on page PS-43 of the
accompanying product supplement no. UBS-1a-I.
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JPMS's Estimated Value of the Securities |
For each offering of the Securities, JPMS's estimated value of the
Securities set forth on the cover of this free writing prospectus is
equal to the sum of the values of the following hypothetical
components: (1) a fixed-income debt component with the same maturity
as the Securities, valued using our internal funding rate for
structured debt described below, and (2) the derivative or
derivatives underlying the economic terms of the Securities. JPMS's
estimated value does not represent a minimum price at which JPMS
would be willing to buy your Securities in any secondary market (if
any exists) at any time. The internal funding rate used in the
determination of JPMS's estimated value generally represents a
discount from the credit spreads for our conventional fixed-rate
debt. For additional information, see "Key Risks Risks Relating to
the Securities Generally JPMS's Estimated Value Is Not Determined
by Reference to Credit Spreads for Our Conventional Fixed-Rate Debt."
The value of the derivative or derivatives underlying the economic
terms of the Securities is derived from JPMS's internal pricing
models. These models are dependent on inputs such as the traded
market prices of comparable derivative instruments and on various
other inputs, some of which are market-observable, and which can
include volatility, dividend rates, interest rates and other factors,
as well as assumptions about future market events and/or
environments. Accordingly, JPMS's estimated value of the Securities
is determined when the terms of the Securities are set based on
market conditions and other relevant factors and assumptions existing
at that time. See "Key Risks Risks Relating to the Securities
Generally JPMS's Estimated Value Does Not Represent Future Values
of the Securities and May Differ from Others' Estimates."
JPMS's estimated value of the Securities will be lower than the
original issue price of the Securities because costs associated with
selling, structuring and hedging the Securities are included in the
original issue price of the Securities. These costs include the
selling commissions paid to UBS, the projected profits, if any, that
our affiliates expect to realize for assuming risks inherent in
hedging our obligations under the Securities and the estimated cost
of hedging our obligations under the Securities. Because hedging our
obligations entails risk and may be influenced by market forces
beyond our control, this hedging may result in a profit that is more
or less than expected, or it may result in a loss. We or one or more
of our affiliates will retain any profits realized in hedging our
obligations under the Securities. See "Key Risks Risks Relating to
the Securities Generally JPMS's Estimated Value of the Securities
Will Be Lower Than the Original Issue Price (Price to Public) of the
Securities" in this free writing prospectus.
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Secondary Market Prices of the Securities |
For information about factors that will impact any secondary market
prices of the Securities, see "Key Risks Risks Relating to the
Securities GenerallySecondary Market Prices of the Securities Will
Be Impacted by Many Economic and Market Factors" in this free writing
prospectus. In addition, we generally expect that some of the costs
included in the original issue price of the Securities will be
partially paid back to you in connection with any repurchases of your
Securities by JPMS in an amount that will decline to zero over an
initial predetermined period that is intended to be approximately six
months. The length of any such initial period reflects secondary
market volumes for the Securities, the structure of the Securities,
whether our affiliates expect to earn a profit in connection with our
hedging activities, the estimated costs of hedging the Securities and
when these costs are incurred, as determined by JPMS. See "Key
RisksRisks Relating to the Securities Generally The Value of the
Securities as Published by JPMS (and Which May Be Reflected on
Customer Account Statements) May Be Higher Than JPMS's Then-Current
Estimated Value of the Securities for a Limited Time Period."
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Supplemental Use of Proceeds |
The Securities are offered to meet investor demand for products that
reflect the risk-return profile and market exposure provided by the
Securities. See "Hypothetical Examples" in this free writing
prospectus for an illustration of the risk-return profile of the
Securities and the section for the applicable Underlying Stock set
forth under "The Underlying Stocks" in this free writing prospectus
for a description of the market exposure provided by the Securities.
The original issue price of the Securities is equal to JPMS's
estimated value of the Securities plus the selling commissions paid
to UBS, plus (minus) the projected profits (losses) that our
affiliates expect to realize for assuming risks inherent in hedging
our obligations under the applicable Securities, plus the estimated
cost of hedging our obligations under the applicable Securities.