Credit Suisse Finally Liquidates ETNs Delisted in 2009
Credit Suisse decided to delist three ETNs on April 3, 2009. That in itself is not strange, but Credit Suisse also made the decision to not liquidate these ETNs. This move, or lack of a move, apparently allowed Credit Suisse to avoid having to return the money to the note-holders, thereby allowing it to continue collecting fees on the ETNs. Earlier this month, Credit Suisse finally announced the repurchase of those ETNs, along with a fourth one that will be delisted prior to tomorrow’s (February 26, 2013) trading.
I cannot think of any reasonable excuse for a firm taking 1,422 calendar days to liquidate a product and return the proceeds to the rightful owners, but that appears to be what Credit Suisse has done. This is one reason I always recommend shareholders to sell before the delisting and avoid the termination process. The only good news is that the investors left holding the bag back in 2009 will now get some money back.
The valuation date was February 15, 2013. Investors will receive a cash payment in an amount equal to the daily repurchase value on the valuation date. The affected notes are:
- ELEMENTS MLCX Gold Index ETN (former NYSE ticker = GOE, former OTC ticker = CDSUI, and CUSIP = 22542D209) was delisted April 3, 2009. Its final redemption amount is $16.88.
- ELEMENTS MLCX Livestock Index ETN (former NYSE ticker = LSO, former OTC ticker = CDSUH, CUSIP = 22542D605) was delisted April 3, 2009. Its final redemption amount is $7.28.
- ELEMENTS MLCX Precious Metals Index ETN (former NYSE ticker = PMY, former OTC ticker = CDSUJ, CUSIP = 22542D506) was delisted April 3, 2009. Its final redemption amount is $13.97.
- ELEMENTS Credit Suisse Global Warming Index ETN (NYSE ticker = GWO and CUSIP = 22542D407) had its trading halted today (2/25/13) and will now be delisted. Its final redemption amount is $8.59.
ELEMENTS Credit Suisse Global Warming Index ETN (GWO) is the only one of the four that still has a listing. However, some shareholders were apparently unaware of the $8.59 redemption value for GWO, as some trades went through as low as $7.28 a few days after the redemption value was established.
One of the above products, ELEMENTS MLCX Gold Index ETN (former NYSE ticker = GOE), is also famous for another reason – it holds the record for price premiums, having traded for multiple days at more than a 1,000% premium.
In 2010, I stated that in my opinion, Credit Suisse obviously cares little about those who invest in its exchange-traded products. The firm has demonstrated an outright disrespect of those investors. I see no reason to change my opinion of Credit Suisse ETNs at this time.
Of the four, only GWO will be counted as a 2013 ETP closure. The other three (GOE, LSO, and PMY) were included in the complete list of 2009 ETP closures when their delisting became effective.
Disclosure covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.