Credit Suisse implemented a 1-for-10 reverse split of its VelocityShares Daily 2x Vix Short Term exchange-traded notes (TVix), on June 23 with investors receiving one reverse split-adjusted ETN for every 10 units of TVix. Providers tend to complete reverse splits when prices start to get close to $1, according to one New York-based structured products banker.
The reverse split will reduce the number of shares available, while also moving the price up, by a factor of 10 in this case, without altering the value for the investor holding the shares. The same operation was carried out on TVix at the end of 2012.
The closing indicative value of TVix on June 22, 2015 will be multiplied by 10 to determine its reverse split-adjusted closing indicative value. The reverse split will affect the trading denominations of TVix but it will not have any effect on the principal amount of the underlying notes, except that the principal amount will be reduced by the aggregate amount of any cash payments for partials.
Holders of a number of units of ETNs not evenly divisible by 10 will receive a cash payment for any fractional number of units remaining of TVix. The cash amount due on any partials was determined on June 30, based on the closing indicative value of TVix and will be paid today (July 1).
The Swiss bank announced a repurchase of its Credit Suisse X-Links Holt Market Neutral Global Equity ETNs and Credit Suisse X-Links 2x Leveraged Merger Arbitrage ETNs which is expected to be implemented on July 6, 2015. The products were not gaining traction after a lengthy period of availability, and were presumably repurchased as “part of summer cleaning,” according to the banker.
Credit Suisse has also announced coupon payments on its X-Links Gold Shares Covered Call and its X-Links Silver Shares Covered Call ETNs, which have returned 9.02% and 10.47%, respectively. Both ETNs are listed on the Nasdaq stock exchange. The payment announcements are standard and vary only on whether the coupons are due to be paid monthly or quarterly.
Credit Suisse would not comment on the changes.
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