UBS AG announced it will redeem all of the outstanding notes of the ETRACS Oil Futures Contango ETN (OILZ) and ETRACS Natural Gas Contango ETN (GASZ). Unlike most redemptions and closures, UBS will determine the final value (call settlement amount) on Jan. 17 but will allow the ETNs to stay listed and continue trading until Jan. 22. The ETNs will then be redeemed, and any remaining investors will be paid on Jan. 23.
These are the first two ETP closures of 2014. The reason for freezing the value with two days of listed trading still remaining is unclear. However, shareholders should trade carefully those two days and not sell at a discount to final value (or purchase at a premium).
The two ETNs have assets of less than $11 million each. OILZ has long been on ETF Deathwatch, but GASZ escaped that designation due to having sufficient trading activity.
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.