Credit Suisse To Delist Large Inverse/Leveraged Oil ETNs

November 17, 2016

Credit Suisse has announced that it will delist and then suspend its pair of leveraged/inverse crude oil ETNs. The Velocity Shares 3x Inverse Crude Oil ETN (DWTI) and the VelocityShares 3x Long Crude Oil ETN (UWTI) are expected to see their last day of trading on Dec. 8, with further issuances suspended as of Dec. 9. However, this does not necessarily represent a “closure” of the ETNs.

The press release notes that although the ETNs will no longer trade on an exchange, they will still be able to trade over-the-counter. Credit Suisse has not opted to accelerate the ETNs’ maturity date, which is currently Feb. 9, 2032, though it has the right to do so. The document notes that investors are free to exercise their own early redemption rights with regard to the products.

DWTI has some $267 million in assets under management, while UWTI has a whopping $1.4 billion, so it is not exactly surprising that this is not a fully realized product closure.

Record Closures

This year has seen a record number of product closures, and several have had unusually high asset levels. For example, the SPDR Nuveen Barclays California Municipal Bond ETF (CXA) had $150 million when its closure was announced earlier this year, and earlier this month, Credit Suisse said with no explanation that it would delist and repurchase the shares of the  Credit Suisse X-Links Cushing MLP Infrastructure ETN (MLPN), which had more than $500 million in assets under management. Historically, products have been considered safe from closure when they have reached the vicinity of $50 million in AUM.

Credit Suisse said in the press release that it was delisting the ETNs “with a view to better aligning its product suite with its broader strategic growth plans.”

Contact Heather Bell at [email protected].

 

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