Barclays Bank PLC (“Barclays”) announced an investor guidance
notification today regarding the iPath® S&P GSCI® Crude Oil
Total Return Index ETN (Ticker: OILNF) (the “ETNs”). The ETNs were
de-listed from NYSE Arca on April 12, 2018 and now trade in
over-the-counter markets.
The ETNs have experienced a persistent and rapid decline in
value since February 20, 2020 as the ETNs’ daily redemption value
dropped approximately 65.3% between February 20, 2020 to March 16,
2020, from $5.9076 to $2.0492. Based on the performance of the
S&P GSCI® Crude Oil Total Return Index (the “Index”) and other
factors that are included in the calculation of the ETNs’ daily
redemption value, there is a potential for the daily redemption
value to drop to $0 in the future. Additionally, as accrued
investor fees in the ETNs grow over time regardless of the
performance of the Index, the magnitude of the decrease in the
level of the Index required for the daily redemption value of the
ETNs to drop to $0 will also reduce progressively.
On November 17, 2016, Barclays previously announced the
suspension of further issuances and sales from its inventory of the
ETNs. As described in that press release and also in the pricing
supplement relating to the ETNs, the limitations implemented on the
issuance and sale of the ETNs could from time to time cause an
imbalance of supply and demand in the secondary market for the
ETNs, which may cause the ETNs to trade at a premium or discount in
relation to their indicative value.
A material premium has developed in the trading price of the
ETNs on the over the counter market (“OTC Market”) in relation to
their intraday indicative value. From February 20, 2020 to March
16, 2020, the daily redemption value of the ETNs decreased by
approximately 65.3%, from $5.9076 to $2.0492 per ETN, while the
closing price of the ETNs on the OTC Market only decreased by
approximately 43.0% from $6.03 to $3.44 per ETN. The closing price
of the ETNs on the OTC Market as of March 16, 2020, reflected a
67.9% premium with respect to its corresponding daily redemption
value.
Investors should exercise extreme caution before purchasing
or selling ETNs at a market price that reflects a premium over the
intraday indicative value or daily redemption value, as the case
may be. The intraday indicative value of the 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 the ETNs from the
previous day. The intraday indicative value of the 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 calculated by us on a daily basis and
is used to determine the payment at maturity or upon early
redemption. The secondary market for the ETNs has been volatile and
unpredictable, and investors should not assume that the ETNs will
continue to trade at a premium in relation to their intraday
indicative value. As a result, if investors purchase the ETNs at
a price which reflects a premium over the intraday indicative value
or daily redemption value, as the case may be, they may experience
a significant loss if they sell the ETNs at a time when such
premium is no longer present, if they redeem the ETNs at the daily
redemption value or if they hold the ETNs until maturity.
For more information on what a premium in the market prices
represents, please refer to the iPath website under “About ETNs.”
Investors are also encouraged to refer to the prospectus relating
to the respective ETNs for risk factors relating to the market
value of the ETNs, including the risks associated with a premium in
market prices on the OTC Market.
The obligation of Barclays to accept any early redemption of
ETNs is subject to the procedures set forth in the section
“Specific Terms of the ETNs—Early Redemption Procedures” in the
prospectus relating to the ETNs. These procedures include
delivering a notice of redemption and signed confirmation to
Barclays prior to the relevant valuation date within the time
frames set forth in the prospectus and instructing the DTC
custodian at which the ETNs are held to book and settle a delivery
vs. payment trade with respect to the ETNs.
An investment in iPath ETNs involves significant risks and
may not be suitable for all investors. The ETNs are riskier than
ordinary unsecured debt securities and have no principal
protection. For more information on risks associated with the ETNs,
please see "Selected Risk Considerations" below and the risk
factors included in the relevant prospectus.
The prospectus for the ETNs to which this communication relates
can be found at:
http://ipathetn.com/oilnfprospectus
Barclays is the issuer of iPath® ETNs and Barclays Capital Inc.
is the Issuer’s agent in the distribution. Please contact Barclays
for further questions:
Financial advisors:
- Directly contact Barclays at etndesk@barclays.com or
1-212-528-7990 to obtain further information
Individual investors:
- Instruct your broker/advisor/custodian to email us at
etndesk@barclays.com or to call us at: 1-212-528-7990
You may call in together with your broker/advisor/custodian or
have them speak to us on your behalf.
About Barclays
Barclays is a British universal bank. We are diversified by
business, by different types of customer and client, and geography.
Our businesses include consumer banking and payments operations
around the world, as well as a top-tier, full service, global
corporate and investment bank, all of which are supported by our
service company which provides technology, operations and
functional services across the Group.
Selected Risk Considerations
An investment in the iPath ETNs described herein involves risks.
Selected risks are summarized here, but we urge you to read the
more detailed explanation of risks described under “Risk Factors”
in the applicable prospectus supplement and pricing supplement.
You May Lose Some or All of Your Principal: The ETNs are
exposed to any decrease in the level of the underlying index
between the applicable inception date and the applicable valuation
date. Additionally, if the level of the underlying index is
insufficient to offset the negative effect of the investor fee and
other applicable costs, you will lose some or all of your
investment at maturity or upon redemption, even if the value of
such index level has increased or decreased, as the case may be.
Because the ETNs are subject to an investor fee and other
applicable costs, the return on the ETNs will always be lower than
the total return on a direct investment in the index components.
The ETNs are riskier than ordinary unsecured debt securities and
have no principal protection.
Credit of Barclays Bank PLC: The ETNs are unsecured debt
obligations of the issuer, Barclays Bank PLC, and are not, either
directly or indirectly, an obligation of or guaranteed by any third
party. Any payment to be made on the ETNs, including any payment at
maturity or upon redemption, depends on the ability of Barclays
Bank PLC to satisfy its obligations as they come due. As a result,
the actual and perceived creditworthiness of Barclays Bank PLC will
affect the market value, if any, of the ETNs prior to maturity or
redemption. In addition, in the event Barclays Bank PLC were to
default on its obligations, you may not receive any amounts owed to
you under the terms of the ETNs.
Market and Volatility Risk: The market value of the ETNs
may be influenced by many unpredictable factors and may fluctuate
between the date you purchase them and the maturity date or
redemption date. You may also sustain a significant loss if you
sell your ETNs in the secondary market. Factors that may influence
the market value of the ETNs include prevailing market prices of
the U.S. stock markets or the U.S. Treasury market, the index
components included in the underlying index, and prevailing market
prices of options on such index or any other financial instruments
related to such index; and supply and demand for the ETNs,
including economic, financial, political, regulatory, geographical
or judicial events that affect the level of such index or other
financial instruments related to such index.
Concentration Risk: Because the ETNs are linked to an
index composed of futures contracts on a single commodity or in
only one commodity sector, the ETNs are less diversified than other
funds. The ETNs can therefore experience greater volatility than
other funds or investments.
A Trading Market for the ETNs May Not Develop: Although
the ETNs are listed on a U.S. national securities exchange, a
trading market for the ETNs may not develop and the liquidity of
the ETNs may be limited, as we are not required to maintain any
listing of the ETNs.
No Interest Payments from the ETNs: You may not receive
any interest payments on the ETNs.
Restrictions on the Minimum Number of ETNs and Date
Restrictions for Redemptions: Except with respect to 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
one time in order to exercise your right to redeem your ETNs on any
redemption date. You may only redeem your ETNs on a redemption date
if we receive a notice of redemption from you by certain dates and
times as set forth in the product prospectus.
Uncertain Tax Treatment: Significant aspects of the tax
treatment of the ETNs are uncertain. You should consult your own
tax advisor about your own tax situation.
The ETNs may be sold throughout the day on the OTC Market
through any brokerage account. There are restrictions on the
minimum number of ETNs you may redeem directly with 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 in the secondary market may result in
significant losses.
The "S&P GSCI® Index Total Return" and "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
for use by Barclays Bank PLC. S&P® and GSCI® are registered
trademarks of Standard & Poors Financial Services LLC ("SPFS").
These trademarks 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, endorsed, or approved by or associated
with Goldman, Sachs & Co. or its affiliated companies. The ETNs
are not sponsored, endorsed, sold or promoted by SPDJI, SPFS, or
any of their respective affiliates (collectively, "S&P Dow
Jones Indices"). S&P Dow Jones Indices does not make any
representation or warranty, express or implied, to the owners of
the ETNs or any member of the public regarding the advisability of
investing in securities generally or in the ETNs particularly or
the ability of the S&P GSCI Indices to track general market
performance.
© 2020 Barclays Bank PLC. All rights reserved. iPath, iPath ETNs
and the iPath logo are registered trademarks of Barclays Bank PLC.
All other trademarks, servicemarks or registered trademarks are the
property, and used with the permission, of their respective
owners.
NOT FDIC INSURED · NO BANK
GUARANTEE · MAY LOSE VALUE
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version on businesswire.com: https://www.businesswire.com/news/home/20200317005813/en/
Press: Danielle Popper +1 212 526 5963
Danielle.Popper@barclays.com
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