Barclays Announces the Redemption of 18 iPath® ETNs
Barclays Bank PLC announced on December 7, 2023, its decision to redeem in full 18 series of iPath® ETNs on June 28, 2024. The affected ETNs include various commodity, currency, and financial index-linked notes. The redemption will occur after a cash tender offer and consent solicitation, amending the indenture for each ETN series. The redemption date is June 28, 2024, and the valuation date is June 21, 2024. Holders can either wait for redemption or sell their ETNs earlier. The redemption will be based on the Closing Indicative Note Value calculated on the valuation date. Investors are advised to consider the inherent risks of ETNs, which lack principal protection and are riskier than ordinary debt securities.
- Barclays is exercising its issuer call option, which demonstrates their strategic financial management.
- The redemption process is organized, with a clear timeline provided.
- Investors are given ample notice and can choose to hold until redemption or sell their ETNs earlier.
- Investors lose the option for holder redemption after the issuer call option is exercised.
- ETNs are inherently riskier than ordinary debt securities, suggesting potential volatility and risk.
- The redemption may disrupt investors' financial plans if they were relying on holding the ETNs long-term.
Insights
The announcement by Barclays to redeem 18 series of iPath® ETNs could have several implications for investors. First, the redemption signals a possible strategy shift or risk management practice by Barclays. Given these ETNs track various commodities and currency indices, the redemption possibly indicates Barclays' reassessment of market exposure or product demand.
These ETNs are designed to provide exposure to asset classes such as commodities, currencies and other niche markets. Investors should understand that ETNs are debt instruments and their value can fluctuate significantly due to underlying asset performance and market conditions. The decision to redeem may reflect Barclays' anticipation of unfavorable market conditions or regulatory changes.
For the retail investor, this action means they must decide whether to sell their ETNs now or hold them until the Redemption Date, with the latter potentially leading to price fluctuations as the date approaches. Investors should closely monitor the indicative note value as it will determine the final redemption amount.
This move could also impact the liquidity of these ETNs in the secondary market. As the Redemption Date nears, the trading volume may decline, making it harder to sell the ETNs at a desired price.
The redemption of these ETNs may indicate broader market trends or changes in investor preferences. ETNs, unlike ETFs, do not hold underlying assets but are rather senior, unsecured debt notes. This makes them more susceptible to credit risk associated with the issuer, in this case, Barclays.
Investors currently holding these ETNs might have chosen them for specific exposure to niche markets like industrial metals or currency exchange rates, which are not easily replicated through other investment products. The redemption forces investors to reassess their portfolios and find alternative investment vehicles to maintain their desired exposure.
For potential investors, it's important to recognize the inherent risks with ETNs, such as credit risk and lack of principal protection. The redemption highlights the need for diversification and careful consideration of the creditworthiness of the ETN issuer.
Long term, Barclays' action could reflect a shift in how financial institutions manage and structure such products, possibly leading to a decrease in similar offerings in the future.
Name of ETN |
Bloomberg Ticker |
CUSIP/ISIN |
iPath® GEMS |
AYTEF |
06738G878 /
|
iPath® Bloomberg Cotton Subindex Total ReturnSM ETN |
BALTF |
06739H271 /
|
iPath® EUR/USD Exchange Rate ETN |
EROTF |
06739F184 /
|
iPath® GBP/USD Exchange Rate ETN |
GBBEF |
06739F176 /
|
iPath® Global Carbon ETN |
GRNTF |
06739H164 /
|
iPath® Optimized Currency Carry ETN |
ICITF |
06739H412 /
|
iPath® GEMS IndexTM ETN |
JEMTF |
06739H453 /
|
iPath® Bloomberg Agriculture Subindex Total ReturnSM ETN |
JJATF |
06739H206 /
|
iPath® Bloomberg Industrial Metals Subindex Total ReturnSM ETN |
JJMTF |
06738G407 /
|
iPath® Bloomberg Nickel Subindex Total ReturnSM ETN |
JJNTF |
06739F119 /
|
iPath® Bloomberg Coffee Subindex Total ReturnSM ETN |
JJOFF |
06739H297 /
|
iPath® Bloomberg Precious Metals Subindex Total ReturnSM ETN |
JJPFF |
06739H248 /
|
iPath® Bloomberg Softs Subindex Total ReturnSM ETN |
JJSSF |
06739H230 /
|
iPath® Bloomberg Tin Subindex Total ReturnSM ETN |
JJTFF |
06739H198 /
|
iPath® Bloomberg Aluminum Subindex Total ReturnSM ETN |
JJUFF |
06739H321 /
|
iPath® JPY/USD Exchange Rate ETN |
JYNFF |
06739G851 /
|
iPath® Asian & Gulf Currency Revaluation ETN |
PGDDF |
06739H420 /
|
iPath® Bloomberg Sugar Subindex Total ReturnSM ETN |
SGGFF |
06739H214 /
|
After obtaining the requisite consents with respect to each series of ETNs in connection with Barclays’ cash tender offer and consent solicitation, Barclays has amended the indenture and global certificate for each series of ETNs to provide Barclays with the right to redeem, in its sole discretion, all, but not less than all, of the outstanding ETNs of each series, on the Redemption Date. Please see the iPath® ETN website at https://ipathetn.barclays/static/tenderoffers.app (the “Information Page”) for further details regarding the tender offer and consent solicitation.
The “Valuation Date” for the redemption of each series of ETNs will be June 21, 2024, the fifth business day prior to the Redemption Date. A holder of the ETNs on the Redemption Date will receive a cash payment per ETN in an amount equal to the applicable Closing Indicative Note Value on the Valuation Date. For more information about how the Closing Indicative Note Value is determined, please refer to the section entitled “Terms and Conditions of the Offers and Consent Solicitations—Closing Indicative Note Value” in the Offer to Purchase and Consent Solicitation Statement dated December 7, 2023, as further supplemented, which is available on the Information Page.
Under the terms of the ETNs, as amended, holders of any series of ETNs subject to issuer redemption will no longer have the option to exercise the holder redemption right. Therefore, no further elections for holder redemption will be accepted by Barclays. Holders of ETNs subject to issuer redemption may choose to continue to hold their ETNs until the Redemption Date or choose to sell their ETNs at a suitable time prior to that.
Anyone considering investing in the ETNs or continuing to hold the ETNs should consider the risks described in the prospectus for the relevant series of ETNs when making an investment decision and consult with their broker or financial adviser to evaluate their investment in the ETNs.
The pricing supplement and prospectus relating to each series of ETNs can be found on EDGAR, the SEC’s website at www.sec.gov, as well as on the product website at the product page for each of the ETNs listed in the table above at ipathetn.barclays.
An investment in the ETNs involves significant risks and may not be suitable for all investors. The ETNs are riskier than ordinary unsecured debt securities and do not benefit from any 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 pricing supplement.
Barclays is the issuer of the 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 customers and clients, and by geography. Our businesses include consumer banking and payments operations around the world, as well as a full-service corporate and investment bank. For further information about Barclays, please visit our website www.barclays.com.
Selected Risk Considerations
An investment in the 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 change in the level of the underlying index or exchange rate, as applicable (the “index”) between the inception date and the applicable valuation date. Additionally, if the level of the 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 level of such index has increased or decreased, as the case may be. 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 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, if 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 commodity markets, the
Concentration Risk: Because the ETNs may be 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: The ETNs are not listed on any securities exchange and the liquidity of the ETNs may be limited.
No Interest Payments from the ETNs: You may not receive any interest payments on the ETNs.
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 through certain brokerage accounts. 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.
© 2024 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
View source version on businesswire.com: https://www.businesswire.com/news/home/20240614060273/en/
Press:
Ann Thielke
+1 212 526 1472
Ann.Thielke@barclays.com
Source: Barclays Bank PLC
FAQ
When will Barclays redeem the 18 iPath ETNs?
What is the valuation date for the redemption of Barclays' ETNs?
What happens to the holder redemption right after Barclays' issuer call option?
How will the redemption amount for Barclays' ETNs be calculated?
What risks should investors consider with Barclays' ETNs?
