NEW YORK–(BUSINESS WIRE) –Barclays Bank PLC (“Barclays”) today announced an investor notification regarding the iPath® S&P GSCI® ETN Total Crude Oil Performance Index (symbol: OILNF / OILND) (the “ETNs”). ETNs were delisted from NYSE Arca on April 12, 2018 and are currently traded on the over-the-counter markets (the “over-the-counter markets”). Barclays had previously announced in its investor directives published on March 17, 2020 that a significant premium had developed in the trading price of ETNs relative to their indicative intraday value and the possibility that the daily redemption value of these ETNs drops to $ 0. Barclays announced on April 17, 2020 that the ETNs would be subject to reverse fractionation, which would be effective on May 1, 2020 (the “reverse fractionation”). Please see the press releases of March 17, 2020 and April 17, 2020 on the Barclays iPath website for more details.
Following the reverse split on May 1, 2020, (i) the CUSIP for ETNs went from 06738C786 to 06738C760 and (ii) ETNs started trading under the stock symbol “OILND”.1 On June 1, 2020, the ETN stock symbol will return to “OILNF”.
Since March 17, 2020, the ETNs have experienced a persistent and rapid decline in value, the daily surrender value of the ETNs having dropped by 100% between March 17, 2020 and April 21, 2020, going from $ 71.84 to $ 0 . The daily cash value of ETNs remained at $ 0 as of May 7, 2020.
A significant premium has developed in the trading price of ETNs on the over-the-counter market compared to their intraday indicative value. From April 1, 2020 to May 7, 2020, the daily redemption value of ETNs decreased by 100%, going from $ 29.2320 to $ 0 per ETN, while the closing price of ETNs on the over-the-counter market n ‘decreased only by approximately 55.4%, from $ 100.80 to $ 45.00 per ETN. The closing price of ETNs on the over-the-counter market on May 7, 2020 reflected a premium of $ 45 over its corresponding daily redemption value.
Investors should exercise extreme caution before buying or selling ETNs at a market price that reflects a premium over the indicative intraday value or the daily redemption value, as the case may be. The intraday indicative value of ETNs is intended to provide investors with an approximation of the effect that changes in the level of the index during the current trading day would have on the daily redemption value of ETNs from the day before . The intraday indicative value of ETNs is calculated and published with a frequency of at least every 15 seconds throughout the trading day. The daily redemption value is the closing value of the ETNs that we calculate daily and is used to determine the payment at maturity or early redemption. The secondary ETN market has been volatile and unpredictable, and investors should not assume that ETNs will continue to trade at a premium relative to their intraday target value. Therefore, if investors buy ETNs at a price that reflects a premium over the intraday target value or the daily redemption value, as the case may be, they may suffer a significant loss if they sell the ETNs at a time. where this premium is no longer present, if they buy back the ETNs at the daily redemption value or if they hold the ETNs until maturity.
For more information on what a premium represents in market prices, please see the iPath website under “About ETNs”. Investors are also encouraged to refer to the respective ETNs prospectus for risk factors related to the market value of ETNs, including the risks associated with a market price premium in the over-the-counter market.
Barclays’ obligation to accept any early redemption from ETN is subject to the procedures defined in the section “Specific conditions of ETNs – Prepayment procedures ”in the prospectus relating to ETNs. These procedures include the delivery of a redemption notice and a signed confirmation to Barclays before the relevant valuation date within the deadlines indicated in the prospectus and the directive of the DTC depositary to which ETNs are required to reserve and settle a delivery against payment operation with respect for ETNs.
Investing in ETath iPaths involves significant risks and may not be suitable for all investors. ETNs are riskier than ordinary unsecured debt securities and have no capital protection. For more information on the risks associated with ETNs, please see below “Considerations relating to selected risks” and the risk factors included in the relevant prospectus.
The prospectus of the ETNs to which this communication relates is available at the following address:
Barclays is the transmitter of iPath® ETN and Barclays Capital Inc. are the agent for the distribution. Please contact Barclays for further questions:
Ask your broker / advisor / custodian to email us at [email protected] or to call us at: 1-212-528-7990
You can call your broker / advisor / custodian or ask them to speak on your behalf.
Barclays is a British universal bank. We are diversified by business, by different types of clients and clients, and by geography. Our operations include consumer banking and payment operations around the world, as well as a leading global full-service service and investment bank, all supported by our service company that provides technologies, operations and functional services across the Group.
Considerations for selected risks
Investing in the ETath iPaths described here involves risks. Some risks are summarized here, but we invite you to read the more detailed explanation of the risks described in the “Risk Factors” section in the prospectus supplement and the applicable pricing supplement.
You can lose part or all of your capital: ETNs are exposed to any drop in the level of the underlying index between the applicable creation date and the applicable valuation date. In addition, if the level of the underlying index is insufficient to offset the negative effect of the investor fees and other applicable fees, you will lose part or all of your investment at maturity or on redemption , even if the value of this index level increased or decreased, as the case may be. Since ETNs are subject to investor fees and other applicable fees, the return on ETNs will always be lower than the total return on a direct investment in the components of the index. ETNs are riskier than ordinary unsecured debt securities and have no capital protection.
Credit from Barclays Bank PLC: ETNs are unsecured debt securities of the issuer, Barclays Bank PLC, and are not, directly or indirectly, a bond or guarantee by a third party. Any payment to be made on ETNs, including any payment at maturity or redemption, depends on the ability of Barclays Bank PLC to honor its obligations as they fall due. Consequently, the actual and perceived solvency of Barclays Bank PLC will, where appropriate, affect the market value of the ETNs before maturity or redemption. In addition, in the event that Barclays Bank PLC fails to fulfill its obligations, you may not receive any amount due to you under ETNs.
Market and volatility risk: The market value of ETNs can be influenced by many unpredictable factors and can vary between the date you purchase them and the maturity date or redemption date. You can also suffer a significant loss if you sell your ETNs on the secondary market. Factors that can influence the market value of ETNs include prevailing market prices on the US stock market or the US Treasury market, the components of the index included in the underlying index and prevailing market prices options on this index or any other financial instrument linked to this index; and the supply and demand for ETNs, including economic, financial, political, regulatory, geographic or judicial events which affect the level of this index or other financial instruments linked to this index.
Concentration risk: Since ETNs are linked to an index composed of futures contracts on a single commodity or in a single commodity sector, ETNs are less diversified than other funds. ETNs may therefore experience greater volatility than other funds or investments.
A trading market for ETNs may not develop: The liquidity of ETNs may be limited, as we are not required to maintain a list of ETNs.
No interest payments from ETNs: You may not receive any interest payments on ETNs.
Restrictions on the minimum number of ETNs and date restrictions for redemptions: Except in the circumstances described above or as otherwise specified in the applicable product prospectus, you must redeem at least the minimum number of ETNs specified in the applicable product prospectus at the same time in order to exercise your right to redeem your ETNs during any redemption. Dated. You can only redeem your ETNs on a redemption date if we receive a redemption notice from you on certain dates and times, as indicated in the product prospectus.
Uncertain tax treatment: Important aspects of the tax treatment of TNCs are uncertain. You should consult your own tax advisor about your own tax situation.
ETNs can be sold throughout the day on the exchange via any brokerage account. There are restrictions on the minimum number of ETNs that you can redeem directly from the issuer, as specified in the applicable prospectus. Commissions may apply and there are tax consequences in the event of sale, redemption or maturity of ETNs. Sales on the secondary market can cause significant losses.
The S&P GSCI Total Return Index and the S&P GSCI Crude Oil Total Return Index (the “S&P GSCI Indices”) are products of S&P Dow Jones Indices LLC (“SPDJI”) and have been licensed by Barclays Bank PLC. S&P® and GSCI® are registered trademarks of Standard & Poor’s Financial Services LLC (“SPFS”). These brands have been licensed to SPDJI and its affiliates and sublicensed to Barclays Bank PLC for certain purposes. The S&P GSCI indices are not owned, approved or approved by or associated with Goldman, Sachs & Co. or its affiliates. ETNs are not sponsored, endorsed, sold or promoted by SPDJI, SPFS or any of their respective affiliates (collectively, the “S&P Dow Jones Indices”). The Dow Jones S&P Indices make no representation or warranty, express or implied, to the owners of ETNs or to any member of the public regarding the advisability of investing in securities in general or in ETNs in particular or the capacity of the S&P Indices GSCI to monitor general market performance.
© 2020 Barclays Bank PLC. All rights reserved. iPath, iPath ETN and the iPath logo are registered trademarks of Barclays Bank PLC. All other trademarks, service marks, or registered trademarks are the property and used with permission of their respective owners.
NOT INSURED FDIC · NO BANK GUARANTEE · MAY LOSE VALUE
1 The temporary ticker change with respect to ETNs is the result of a procedural requirement implemented by the Financial Industry Regulatory Authority, which requires that securities that undergo reverse splits temporarily trade under a new CUSIP for a period of 20 working days.