Barclays Bank PLC (“Barclays”) announced that today is the first day of trading for three iPath® Exchange Traded Notes (ETNs) on the Toronto Stock Exchange. The iPath® ETNs are the first ETNs to be listed locally on an exchange in Canada.
The ETNs were created to provide investors with access to USD-denominated indices in a CAD-hedged and locally issued format. The following are the new iPath ETNs and their exchange tickers:
1. iPath® S&P 500 VIX Short-Term FuturesTM CAD Hedged ETN (VIX)
2. iPath® S&P 500 Dynamic VIX CAD Hedged ETN (DVX)
3. iPath® Pure Beta Crude Oil CAD Hedged ETN (PBO)
The volatility linked ETNs, VIX and DVX, are linked to the S&P 500 VIX Short-Term Futures TM IndexTR and the S&P 500® Dynamic VIX Futures™ Total Return Index, respectively. VIX offers exposure to shorter-term futures on the CBOE Volatility Index and DVX offers exposure to a dynamic strategy that aims to reduce the effects of contango during normal or low volatility regimes. These products can be used to manage or hedge risk and express a directional view on volatility.
The commodity linked ETN, PBO, is linked to the Barclays WTI Crude Oil Pure Beta Index. This ETN is designed to provide investors with exposure to an index that aims to provide a more representative exposure to the underlying WTI crude oil commodity than traditional front month futures based indices.
“We are pleased to offer investors in Canada access to products that offer exposure to USD underlying indices, while mitigating currency risk,” said Johnny Wu, Head of Investor Solutions, Americas, at Barclays. “The launch of today’s volatility and commodity-linked ETNs demonstrates our ongoing commitment to providing investors, around the globe, with access to difficult-to reach markets through ETNs.”
Barclays is a global leader in ETNs with $8 billion in assets under management. The firm has ETNs listed in the US, UK, Germany, Italy, Singapore and Japan.
iPath ETNs are designed to provide investors with convenient access to the returns of market benchmarks, less investor fees and other applicable costs. Subject to the requirements described in the applicable prospectus, the ETNs can be sold in the secondary market during trading hours at market prices, and may typically be redeemed in 25,000 units for VIX and DVX, and 50,000 units for PBO on a daily basis directly to Barclays Capital Inc., an affiliate of the issuer.
Selected Risk Considerations
An investment in the iPath ETNs described herein (the “ETNs”) 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.
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 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 has increased. Because the ETNs are subject to an investor fee and any 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.
The ETNs Are Not Insured Deposit Liabilities: The ETNs are not deposit liabilities of Barclays Bank PLC and are not insured by the Canada Deposit Insurance Corporation, the U.S. Federal Deposit Insurance Corporation or any other governmental agency of Canada, the United States, the United Kingdom or any other jurisdiction.
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.
Issuer Redemption: Barclays Bank PLC will have the right to redeem or “call” a series of ETNs (in whole but not in part) at its sole discretion and without your consent on any business day on or after the inception date until and including maturity.
A Trading Market for the ETNs May Not Develop: Although the ETNs are listed on the Toronto Stock 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: You must redeem at least 25,000 or 50,000 (depending on the series) ETNs of the same series 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 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.
Barclays Bank PLC has filed a prospectus with the Canadian securities regulatory authorities for the offering to which this communication relates. Before you invest, you should read the prospectus and other documents Barclays Bank PLC has filed with the Canadian securities regulatory authorities for more complete information about the issuer and this offering. You may get these documents for free by visiting www.iPathETN.ca or SEDAR at www.sedar.com. Alternatively, Barclays Capital Canada Inc. will send you the prospectus if you request it by calling toll-free 1-877-764-7284.
“Standard & Poor’s®”, “S&P®”, “S&P 500®”, “Standard & Poor’s 500TM”, “S&P 500 VIX Short-Term Futures™”, “S&P 500 VIX Mid-Term Futures™” and “S&P 500® Dynamic VIX Futures™” are trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and have been licensed for use by Barclays Bank PLC. “VIX” is a registered trademark of the Chicago Board Options Exchange, Incorporated (“CBOE”) and has been licensed for use by S&P. The ETNs are not sponsored, endorsed, sold or promoted by S&P or the CBOE. S&P and CBOE make no representation, condition 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 or in the ability of either index to track market performance.
Each of the Barclays commodities indices referenced herein is a trademark of Barclays Bank PLC.
© 2012 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.
Barclays moves, lends, invests and protects money for customers and clients worldwide. With over 300 years of history and expertise in banking, we operate in over 50 countries and employ over 140,000 people.
We provide large corporate, government and institutional clients with a full spectrum of solutions to their strategic advisory, financing and risk management needs. Our clients also benefit from access to the breadth of expertise across Barclays. We’re one of the largest financial services providers in the world, and are also engaged in retail banking, credit cards, corporate banking, and wealth and investment management.
Barclays offers premier investment banking products and services to its clients through Barclays Bank PLC.
For more information, visit www.barclays.com
Kristin Friel, +1 212 412 7521