Last checked at 4 Aug 2017 15:54
ETFS Commodity Securities Limited
LEI: 21380068Q1JSIAN4FO63
4 August 2017
ETFS Commodity Securities Limited
ETFS Classic and Longer Dated Commodity Securities
ETFS Short and Leveraged Commodity Securities
Collateral Changes
Under the current Security Agreement between ETFS Commodity Securities Limited ("CSL" or the "Issuer") and Merrill Lynch Commodities, Inc. ("MLCI"), Japanese government debt securities ("JGBs") constitute eligible collateral subject to a minimum credit rating of 'AA' by S&P or Fitch or 'Aa2' by Moody's and subject to an over-collateralisation requirement of between zero and 2 per cent. depending on maturity.
The Issuer now announces that it has agreed with MLCI that, with immediate effect and until the Effective Date (as referred to below), the requirements for JGBs to constitute eligible collateral for the purposes of the Security Agreement with MLCI will be amended so that JGBs will be subject to a lower minimum credit rating of 'A‑' by S&P or Fitch or 'A3' by Moody's but subject to a higher over-collateralisation requirement of between 6 per cent. and 11 per cent. depending on maturity. The effect of this over-collateralisation requirement is that in determining whether the value of the Collateral is at least equal to the Collateral Exposure, the market value of the relevant JGBs (as determined by the Securities Intermediary) will be divided by (in this case) between 1.06 and 1.11.
As announced by the Issuer on 3 July 2017, with effect from the Effective Date (such date as may be specified or determined in accordance with the terms of a further announcement to be made by the Issuer but not being less than 30 days from 3 July 2017) and subject as described therein, the obligations of MLCI in respect of Commodity Contracts entered into pursuant to its Facility Agreements will be assumed by Merrill Lynch International.
Terms used in this announcement and not otherwise defined bear the meanings given, in relation to the ETFS Classic and Longer Dated Commodity Securities, in the prospectus of the Issuer dated 12 April 2017 and in relation to the ETFS Short and Leveraged Commodity Securities, in the prospectus of the Issuer dated 6 September 2016.
For further information, please contact:
Ciaran Hocking
R&H Fund Services (Jersey) Limited
Tel: +44 (0) 1534 825200
Fax: +44 (0) 1534 825335
E-mail address: etfsjersey@rhfsl.com