JPMorgan Chase & Co. Declares Quarterly Coupon on Alerian MLP Index ETN
- None.
- Investors buying Notes at a premium could incur significant losses if the premium dissipates before selling.
- The Current Yield is not indicative of future coupon payments on the Notes.
Insights
The announcement by JPMorgan Chase & Co. regarding the quarterly coupon amount for the Alerian MLP Index ETN is a significant piece of information for investors, particularly those involved in energy infrastructure investing. The coupon payment of $0.4227 per note, reflecting a current yield of 6.2%, is a critical metric. This yield is relatively attractive compared to current fixed-income alternatives, potentially indicating a robust income stream for investors. However, it's essential to note that the yield is not a guarantee of future payments, as it can fluctuate with the underlying assets in the MLP sector and market conditions.
Furthermore, the mention of a maximum issuance limitation of 129,000,000 Notes is an important consideration. This cap can lead to scarcity in the market, potentially causing the notes to trade at a premium over the indicative note value. While this might seem beneficial for current holders, it presents a risk for new investors paying a premium, as they might face losses if they sell when the premium diminishes. This scenario underscores the importance of understanding the liquidity and market dynamics of ETNs before investing.
Examining the Alerian MLP Index ETN's performance and its implications on the broader exchange-traded note (ETN) market offers valuable insights. The ETN is linked to the performance of the Alerian MLP Index, which consists of prominent midstream energy Master Limited Partnerships (MLPs). These entities often operate in energy infrastructure and are known for distributing most of their cash flow to investors, hence the relatively high yield. The index's performance is closely tied to the health of the energy sector, commodity prices and regulatory changes affecting MLPs.
It's also critical to consider the role of midstream operations in the energy supply chain, especially given current global energy dynamics. With energy security and infrastructure becoming increasingly important, MLPs and, by extension, MLP-linked ETNs like AMJ could see heightened investor interest. However, investors should also be aware of the tax implications of investing in MLPs, as they can be complex and differ from those of other equities.
From a legal standpoint, the disclosure of the coupon amount and the note's current yield is a regulatory requirement, ensuring transparency for investors. The referenced Market-Making Supplement provides detailed legal information that governs the Notes and it is crucial for investors to review this document to understand the terms, risks and obligations associated with the investment.
Additionally, the nature of ETNs as senior, unsecured obligations of JPMorgan Chase & Co. means they are subject to the creditworthiness of the issuer. In the event of a default, ETN investors would be in line with other unsecured creditors, which is a risk factor that must be carefully weighed against the potential returns of the investment.
NYSE Arca Ticker |
Registered Issue Name |
Declaration Date |
Ex-Date |
Record Date |
Payment Date |
Coupon Amount1 per Note |
Current Yield2 |
AMJ |
Alerian MLP Index ETN |
Feb 21, 2024 |
Feb 28, 2024 |
Feb 29, 2024 |
March 8, 2024 |
|
|
The Notes are subject to a maximum issuance limitation of 129,000,000 Notes, which may cause the Notes to trade at a premium relative to the indicative note value. Investors that pay a premium for the Notes could incur significant losses if that investor sells its notes at a time when some or all of the premium is no longer present.
1) As defined in the Market-Making Supplement, dated April 13, 2023 for the Notes.
You may access this market making supplement as follows:
https://www.sec.gov/Archives/edgar/data/19617/000121390023029590/ea152994_424b2.htm
2) “Current Yield” equals the current Coupon Amount annualized and divided by the closing price of the Notes on February 20, 2024 and rounded to one decimal place for ease of analysis. The Current Yield is not indicative of future coupon payments, if any, on the Notes.
The Notes are senior, unsecured obligations of JPMorgan Chase & Co.
About JPMorgan Chase & Co.
JPMorgan Chase & Co. (NYSE: JPM) is a leading financial services firm based in
Investment suitability must be determined individually for each investor, and the Notes may not be suitable for all investors. This information is not intended to provide and should not be relied upon as providing accounting, legal, regulatory or tax advice.
Investors should consult with their own advisors as to these matters.
JPMorgan Chase & Co. has filed a registration statement (including a prospectus) with the Securities and Exchange Commission, or SEC, for the offering to which this communication relates.
Before you invest, you should read the prospectus in that registration statement and the other documents relating to this offering that JPMorgan Chase & Co. has filed with the SEC for more complete information about JPMorgan Chase & Co. and this offering.
You may get these documents without cost by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, JPMorganChase & Co., any agent or any dealer participating in this offering will arrange to send you the prospectus, the prospectus supplement, the product supplement and the pricing supplement if you so request by calling toll-free 800-576-3529.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240221848931/en/
Questions? Contact: JPMorgan Alerian ETN team, 1-800-576-3529 alerian_etn@jpmorgan.com
Source: JPMorgan Chase & Co.
FAQ
What is the quarterly coupon amount announced by JPMorgan Chase & Co. for the Alerian MLP Index ETN (NYSE Arca: AMJ)?
What is the current yield for the Alerian MLP Index ETN (NYSE Arca: AMJ)?
What is the maximum issuance limitation for the Alerian MLP Index ETN (NYSE Arca: AMJ)?
What caution is provided to investors regarding the premium paid for the Notes?
Are the Notes senior or unsecured obligations of JPMorgan Chase & Co.?
