Barclays Bank PLC announced today that it expects the NYSE Arca to commence proceedings to delist the iPath Bloomberg Natural Gas Subindex Total ReturnSM Exchange Traded Notes (GAZ) from the NYSE Arca. The delisting decision was reached because such condition exists, which in the opinion of NYSE Arca, makes further dealings on the exchange inadvisable pursuant to NYSE Arca Rule 5.2-E(j)(6)(B)(II)(2)(b)(iii). Specifically, the Notes are no longer suitable for listing based on abnormally low trading prices. The Index underlying the ETNs is the Bloomberg Natural Gas Subindex Total Return, with Bloomberg ticker BCOMNGTR.
Barclays expects the NYSE Arca to commence delisting proceedings in the next several days and the suspension of trading for the ETNs today. Following the delisting, the ETNs may trade, if at all, on an over-the-counter basis, the secondary market for the ETNs may experience a significant drop in liquidity, and holders of the ETNs may not be able to trade or sell their ETNs easily.
Barclays previously issued investor guidance notices on December 8, 2017, March 8, 2017, December 22, 2015 and November 9, 2015 regarding the decline in the daily redemption value of the ETNs and the likelihood of premiums and discounts in the secondary market prices to persist.
The ETN holders’ option to require Barclays to repurchase the ETNs will not be affected by this delisting. Barclays previously announced the waiver of the minimum early redemption size of 50,000 ETNs with respect to the valuation date occurring on each Wednesday (or, if such calendar day is not a trading day, the trading day immediately thereafter). The minimum early redemption size for any other day of the month was reduced to 5,000 ETNs from 50,000 ETNs. These changes took effect on March 9, 2017 and will be effective for the next three years ending on and including March 9, 2020 unless extended by Barclays at its sole discretion.
The obligation of Barclays to accept any early redemption of ETNs is subject to the procedures set forth in the section “Specific Terms of the ETNs—Early Redemption Procedures” in the prospectus relating to the ETNs. These procedures include delivering a notice of redemption and signed confirmation to Barclays prior to the relevant valuation date within the time frames set forth in the prospectus and instructing the DTC custodian at which the ETNs are held to book and settle a delivery vs. payment trade with respect to the ETNs. Please refer to the press release on March 8, 2017 for more details.
Barclays also announced the listing of a new ETN (Ticker: GAZB) linked to the same Index earlier this year. The New ETNs offer a similar exposure as the existing ETNs (Old ETNs), but will include certain differences, including a reduced investor fee and an issuer redemption feature. Please refer to the
associated press release on March 8, 2017 for more details.
Holders of the Old ETNs that wish to sell their Old ETNs and/or purchase New ETNs may take any of the following actions:
1) Sell Old ETNs and/or purchase New ETNs on the secondary market at the prevailing trading price on the exchange (subject to relevant trading restrictions on the Old ETNs);
2) Put Old ETNs to Barclays (including with respect to the valuation date occurring on each Wednesday with reduced minimum early redemption sizes) and simultaneously purchase New ETNs from Barclays in an amount having an equal dollar value, with each transaction having the same valuation date and settlement date (a “Net Settlement”). In this case, upon redemption of its Old ETNs, the holder would receive a number of New ETNs equal to the aggregate daily redemption value of the redeemed Old ETNs, rounded to the nearest full New ETN, with a residual cash payment for any “partial” remaining ETNs.
3) Put Old ETNs to Barclays under the early redemption option without simultaneously purchasing New ETNs or purchase New ETNs from Barclays without simultaneously redeeming Old ETNs, in each case for the applicable cash value.
Any redemption of Old ETNs or sale of New ETNs is subject to the conditions described in the prospectus for the relevant series of ETNs and will be valued using the applicable daily redemption value or closing indicative value on the valuation date for the transaction, with no additional purchase or redemption fees, in each case in accordance with the prospectus for the relevant series of ETNs. Holders are not required to take any of the actions set forth above and may choose to continue to hold their ETNs at any time.