Barclays today announced today that it will implement a 1 for 4 reverse
split of its iPath® S&P 500 VIX Short-Term FuturesTM
Exchange Traded Notes (the “ETNs”) effective Friday, November 8, 2013.
The ETNs trade on the NYSE Arca stock exchange under the ticker symbol
VXX and on the Toronto Stock Exchange (“TSX”) under ticker symbols VXX
and VXX.U. Barclays Bank PLC has the right (but no obligation) to
initiate such a reverse split if the closing indicative value of the
ETNs falls below $25.00 on any business day, as described in the pricing
supplement relating to the ETNs. On October 25, 2013, the closing
indicative value of the ETNs was $12.85.
The record date for the reverse split will be the close of business, New
York time, on November 7, 2013. The closing indicative value of the ETNs
on the record date will be multiplied by four to determine the
reverse-split adjusted value of the ETNs. The reverse split will be
effective at the open of trading on November 8, 2013 and the ETNs will
begin trading on the NYSE Arca and the TSX on a reverse-split adjusted
basis on such date. The reverse-split adjusted ETNs will have a new
CUSIP, but will retain the same ticker symbols.
Investors who, as of the record date, hold a number of ETNs that is not
divisible by four will receive one reverse-split adjusted ETN for every
four ETNs held on the record date and a cash payment for any odd number
of ETNs remaining (the “partials”). The cash amount due on any partials
will be determined on November 15, 2013, based on the closing indicative
value of the reverse-split adjusted ETNs on such date and will be paid
by Barclays Bank PLC on November 20, 2013.
An investment in iPath ETNs involves significant risks and may not be
suitable for all investors. The ETNs are riskier than ordinary unsecured
debt securities and have no principal protection. For more information
on risks associated with the ETNs, please see "Selected Risk
Considerations" below and the risk factors included in the relevant
prospectus.
For more information regarding the reverse split process, including how
the reverse-split adjusted value is determined, see the pricing
supplement relating to the ETNs under the heading “Specific Terms of the
ETNs—Split or Reverse Split.” The pricing supplement relating to the
ETNs can be found on EDGAR, the SEC website, at: www.sec.gov.
The prospectus is also available on the product website at www.iPathETN.com.
Selected Risk Considerations
An investment in the iPath ETNs described herein (the “ETNs”) involves
risks. Selected risks are summarized here, but we urge you to read the
more detailed explanation of risks described under “Risk Factors” in the
applicable prospectus supplement and pricing supplement.
You May Lose Some or All of Your Principal: The ETNs are exposed
to any decrease in the level of the underlying index between the
inception date and the applicable valuation date. Additionally, if the
level of the underlying index is insufficient to offset the negative
effect of the investor fee and other applicable costs, you will lose
some or all of your investment at maturity or upon redemption, even if
the value of such index has increased. Because the ETNs are subject to
an investor fee and any other applicable costs, the return on the ETNs
will always be lower than the total return on a direct investment in the
index components. The ETNs are riskier than ordinary unsecured debt
securities and have no principal protection.
Credit of Barclays Bank PLC: The ETNs are unsecured debt
obligations of the issuer, Barclays Bank PLC, and are not, either
directly or indirectly, an obligation of or guaranteed by any third
party. Any payment to be made on the ETNs, including any payment at
maturity or upon redemption, depends on the ability of Barclays Bank PLC
to satisfy its obligations as they come due. As a result, the actual and
perceived creditworthiness of Barclays Bank PLC will affect the market
value, if any, of the ETNs prior to maturity or redemption. In addition,
in the event Barclays Bank PLC were to default on its obligations, you
may not receive any amounts owed to you under the terms of the ETNs.
The Performance of the Underlying Indices are Unpredictable:
An investment in the ETNs is subject to risks associated with
fluctuations, particularly a decline, in the performance of the
underlying index. Because the performance of such index is linked to
futures contracts on the CBOE® Volatility Index (the “VIX
Index”), the performance of the underlying index will depend on many
factors including, the level of the S&P 500®, the prices
of options on the S&P 500®, and the level of the VIX
Index which may change unpredictably, affecting the value of futures
contracts on the VIX Index and, consequently, the level of the
underlying index. Additional factors that may contribute to fluctuations
in the level of such index include prevailing market prices and forward
volatility levels of the U.S. stock markets and the equity securities
included in the S&P 500®, the prevailing market prices of
options on the VIX Index, relevant futures contracts on the VIX Index,
or any other financial instruments related to the S&P 500®
and the VIX Index, interest rates, supply and demand in the listed and
over-the-counter equity derivative markets as well as hedging activities
in the equity-linked structured product markets.
Your ETNs Are Not Linked to the VIX Index: The value of your ETNs
will be linked to the value of the underlying index, and your ability to
benefit from any rise or fall in the level of the VIX Index is limited.
The index underlying your ETNs is based upon holding a rolling long
position in futures on the VIX Index. These futures will not necessarily
track the performance of the VIX Index. Your ETNs may not benefit from
increases in the level of the VIX Index because such increases will not
necessarily cause the level of VIX Index futures to rise. Accordingly, a
hypothetical investment that was linked directly to the VIX Index could
generate a higher return than your ETNs.
Market and Volatility Risk: The market value of the ETNs may be
influenced by many unpredictable factors and may fluctuate between the
date you purchase them and the maturity date or redemption date. You may
also sustain a significant loss if you sell your ETNs in the secondary
market. Factors that may influence the market value of the ETNs include
prevailing market prices of the U.S. stock markets, the index components
included in the underlying index, and prevailing market prices of
options on such index or any other financial instruments related to such
index; and supply and demand for the ETNs, including economic,
financial, political, regulatory, geographical or judicial events that
affect the level of such index or other financial instruments related to
such index.
A Trading Market for the ETNs May Not Develop: Although the ETNs
are listed on NYSE Arca, a trading market for the ETNs may not develop
and the liquidity of the ETNs may be limited, as we are not required to
maintain any listing of the ETNs.
No Interest Payments from the ETNs: You may not receive any
interest payments on the ETNs.
Restrictions on the Minimum Number of ETNs and Date Restrictions for
Redemptions: You must redeem at least 25,000 ETNs of the same series
at one time in order to exercise your right to redeem your ETNs on any
redemption date. You may only redeem your ETNs on a redemption date if
we receive a notice of redemption from you by certain dates and times as
set forth in the pricing supplement.
Uncertain Tax Treatment: Significant aspects of the tax treatment
of the ETNs are uncertain. You should consult your own tax advisor about
your own tax situation.
Barclays Bank PLC has filed a registration statement (including a
prospectus) with the SEC for the offering to which this communication
relates. Before you invest, you should read the prospectus and other
documents Barclays Bank PLC has filed with the SEC for more complete
information about the issuer and this offering. You may get these
documents for free by visiting www.iPathETN.com
or EDGAR on the SEC website at www.sec.gov.
Alternatively, Barclays Bank PLC will arrange for Barclays Capital Inc.
to send you the prospectus if you request it by calling toll-free
1-877-764-7284, or you may request a copy from any other dealer
participating in the offering.
BlackRock Investments, LLC, assists in the promotion of the iPath ETNs.
The ETNs may be sold throughout the day on the exchange through any
brokerage account. There are restrictions on the minimum number of ETNs
you may redeem directly with the issuer as specified in the applicable
prospectus. Commissions may apply and there are tax consequences in the
event of sale, redemption or maturity of ETNs. Sales in the secondary
market may result in significant losses.
The S&P 500 VIX Short-Term Futures™” Index (the “Index”) is a product of
S&P Dow Jones Indices LLC (“SPDJI”). S&P®, S&P 500®
and S&P 500® VIX Short-Term Futures™” are trademarks of
Standard & Poor’s Financial Services LLC (“SPFS”). VIX®
is a registered trademark of Chicago Board Options Exchange,
Incorporated (“CBOE”). These trademarks have been licensed to S&P Dow
Jones Indices LLC (“SPDJI”) and its affiliates, and sublicensed to
Barclays Bank PLC for certain purposes. The ETNs are not sponsored,
endorsed, sold or promoted by SPDJI, SPFS, CBOE or any of their
respective affiliates (collectively, “S&P Dow Jones Indices”). S&P Dow
Jones Indices does not make any representation or warranty, express or
implied, to the owners of the ETNs or any member of the public regarding
the advisability of investing in securities generally or in the ETNs
particularly or the ability of the Index to track general market
performance.
© 2013 Barclays Bank PLC. All rights reserved. iPath, iPath ETNs and the
iPath logo are registered trademarks of Barclays Bank PLC. All other
trademarks, servicemarks or registered trademarks are the property, and
used with the permission, of their respective owners.
NOT FDIC INSURED · NO BANK GUARANTEE · MAY LOSE VALUE
Barclays is a major global financial services provider engaged in
personal banking, credit cards, corporate and investment banking and
wealth and investment management with an extensive international
presence in Europe, the Americas, Africa and Asia. Barclays’ purpose is
to help people achieve their ambitions – in the right way. With over 300
years of history and expertise in banking, Barclays operates in over 50
countries and employs approximately 140,000 people. Barclays moves,
lends, invests and protects money for customers and clients worldwide.
For further information about Barclays, please visit our website www.barclays.com.
Copyright Business Wire 2013