Credit Suisse ‘Accelerating’ ETNs

Credit Suisse has announced it is “accelerating” five of its 26 ETNs to next month. Acceleration of an ETN essentially means their due dates are moving up, so investors will receive the closing indicative value of the ETNs earlier than was originally scheduled on Aug. 15.

The five affected ETNs and their original due dates are as follows:

• VelocityShares Daily 2x VIX Medium-Term ETN (TVIZ) due Dec. 4, 2030
• VelocityShares VIX Medium Term ETN (VIIZ) due Dec. 4, 2030
• Credit Suisse X-Links WTI Crude Oil Index ETN (OIIL) due Feb. 8, 2036
• AxelaTrader 3x Long Brent Crude Oil ETN (UBRT) due Sept. 14, 2037
• AxelaTrader 3x Inverse Brent Crude Oil ETN (DBRT) due Sept. 14, 2037

TVIZ and VIIZ both list on the Nasdaq, and will have an accelerated valuation date on Aug. 15. They were originally set to mature on Dec. 4, 2030.

The remaining three products list on the NYSE Arca and will have an accelerated valuation period lasting from Aug. 6 to Aug. 10. OILL was originally set to mature on Feb. 8, 2036, while UBRT and DBRT were set to mature on Sept. 14, 2037.

Background

It’s not clear what triggered the acceleration of the five ETNs. Credit Suisse has the right to accelerate the notes as needed.

This isn’t the first time Credit Suisse has shut down an ETN early. Most notably in late 2016, it delisted (but did not accelerate) its 3x and -3x oil ETNs, which had nearly $1 billion in combined assets. The move appears to have taken investors by surprise, and they retained a few hundred million in assets for some time after they began trading over-the-counter.

It was assumed by many that Credit Suisse was looking to clean up its balance sheet. The shutdowns spurred the launch of several pairs of triple-exposure oil products in 2017, including UBRT and DBRT.

The ETFs all have less than $7 million in assets each. OIIL rolled out in February 2016, while TVIZ and VIIZ both launched in November 2010.

With the closure of the 50 iPath ETNs in April, 2018 is heading toward another record-breaking year for ETF shutdowns. More than 90 ETFs have closed so far this year; in 2017, by this time, the number was 61.

Contact Heather Bell at [email protected]