Wednesday, June 5, 2013, will be the last day of trading for seven exchange traded notes (ETNs) issued by UBS under the ETRACS brand. The final redemption value will be determined at the close of business the following day (June 6). To avoid any closure-related surprises, we believe it is in the best interest of note holders to dispose of their shares on the open market prior to the de-listing and redemption.
The seven closing ETNs are:
- ETRACS DJ-UBS Commodity Index 2-4-6 Blended Futures ETN (BLND)
- ETRACS Monthly 2x Leveraged ISE Cloud Computing Total Return ETN (LSKY)
- ETRACS Inverse UBS Bloomberg CMCI Platinum Excess Return ETN (PTD)
- ETRACS Next Generation Internet ETN (EIPO)
- ETRACS Monthly 2x Leveraged Next Generation Internet ETN (EIPL)
- ETRACS ISE Solid State Drive Index ETN (SSDD)
- ETRACS Monthly 2x Leveraged ISE Solid State Drive Index ETN (SSDL)
Assets in the closing products total less than $60 million and range from a low of $3 million for PTD to a high of just over $16 million for LSKY. All but one of the closing products is less than two years old. BLND is the youngest, introduced just 13 months ago, while PTD is the oldest and has been around more than five years. All seven ETNs are on ETF Deathwatch.
The criteria used by UBS in deciding which ETNs to close was not given. However, some products appeared to be spared for strategic reasons. For example, three products with less than $5 million each in assets escaped closure at this time, presumably because they are part of a lineup of basic commodity ETNs. They are ETRACS CMCI Energy TR ETN (UBN), ETRACS CMCI Industrial Metals TR ETN (UBM), and ETRACS CMCI Livestock TR ETN (UBC).
All previous UBS ETRACS closures were VIX-related ETNs. Additional information about the seven new closures can be found in the UBS press release.
Disclosure: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.