Last checked at 3 Oct 2014 16:40
RNS Number : 4582T
ETFS Commodity Securities Limited
3 October 2014
ETFS COMMODITY SECURITIES LIMITED
(Incorporated and registered in Jersey under the Companies (Jersey) Law 1991(as amended) with registered number 90959)
(the "Issuer")
Notice regarding ETFS Leveraged Commodity Securities and ETFS Short Commodity Securities
Proposed convening of Meetings to reduce Principal Amountsof the ETFS Leveraged Commodity Securities and the ETFS Short Commodity Securities of certain classes
Following recent changes in commodity prices generally and in respect of Wheat in particular, the Prices of certain ETFS Leveraged Commodity Securities and ETFS Short Commodity Securities ("Securities") have fallen towards their respective Principal Amounts. As a result of these falls in Price, the Issuer is preparing a circular to the holders of certain classes of ETFS Leveraged Commodity Securities and ETFS Short Commodity Securities, convening meetings for the purposes of seeking approval from Security Holders to reduce the Principal Amounts of the affected classes of ETFS Leveraged Commodity Securities and ETFS Short Commodity Securities, including ETFS Daily Leveraged Wheat Individual Securities ("LWEA").
Prior to the proposed meetings of Security Holders the Issuer may, under Condition 7.18 of the Securities, suspend the right to Redeem any such Securities under Condition 7.1(a) (Settlement Pricing) whose Price falls below the Principal Amount. If this occurs, redemptions under Condition 7.1(b) (Agreed Pricing) will continue to occur normally. This procedure has been designed to ensure that all Security Holders who are able to redeem Securities, can each continue to receive a price for their Securities based on the relevant Commodity Index.
Based on the trading price of Wheat on the Chicago Board of Trade, it is possible that the Settlement Price for The Bloomberg Wheat Sub-IndexSM, by reference to which the Price of the LWEA Securities is calculated, may soon, be such that the Price of the LWEA securities will fall below their Principal Amount. If the Price of the LWEA securities does fall below US$0.51, then the right to Redeem such securities under Condition 7.1(a) (Settlement Pricing) will then be suspended under Condition 7.18 until further notice. All Settlement Redemption Forms lodged on or after the day when the Price falls below US$0.51 will in that event be invalid under Condition 7.18(c).
To enable normal Redemptions to continue all Redemptions under Agreed Pricing for LWEA will, unless otherwise agreed, be based on the closing settlement price level of the relevant Commodity Index and the pricing formula as stated in the Prospectus. This will allow the creation and redemption of the Securities to continue unaffected. Accordingly the Issuer does not expect any disruption to trading in the ETFS Daily Leveraged Wheat Individual Securities or, more generally, the ETFS Leveraged Commodity Securities and ETFS Short Commodity Securities.
The Issuer intends to terminate the temporary suspension of Redemption by Settlement Pricing once the Issuer has received approval from the Security Holders to reduce the Principal Amount as provided for in the circular to be issued in due course. The proposed meetings will not affect Security Holders of other Commodity Securities including Classic Commodity Securities and Longer Dated Commodity Securities.
Security Holders should note that the current circumstances are contemplated in the Prospectus, should there be significant falls in commodity prices and the relevant commodity indices.
A further announcement will be made in due course.
For further information, please contact
Richard Parker,
R&H Fund Services (Jersey) Limited
Tel: +44 (0) 1534 825200
Fax: +44 (0) 1534 825335
E-mail address: richard.parker@rhfsl.com