Barclays prices tender offer for iPath S&P GSCI Crude Oil ETNs

By Wendy Van Sickle

Columbus, Ohio, Jan. 3 – Barclays Bank plc announced the purchase price in its cash tender offer to purchase any and all of its iPath S&P GSCI Crude Oil Total Return index exchange-traded notes due Aug. 14, 2036 (Cusip: 06738C760) linked to the S&P GSCI Crude Oil Total Return index.

The purchase price is $202.08 per note, which reflects a 3% premium to the closing indicative note value of the notes on Jan. 3, which was $196.19, according to a Tuesday press release.

The tender offer and related consent solicitation will expire at 11:59 p.m. ET on Jan. 3, after being previously extended from 11:59 p.m. ET on Nov. 30. The purchase price was previously raised to the 3% premium from a 2% premium.

The purchase price is payable on Jan. 5. The settlement date was extended from Dec. 2.

As of 11:59 p.m. ET on Nov. 30, holders had tendered 98,990 notes, representing 27.27% of the outstanding notes.

As announced at the launch of the tender offer on Oct. 28, Barclays is also soliciting consents from holders of the ETNs to a proposed amendment that would allow it to redeem in full the outstanding notes.

Noteholders who tender their notes will be deemed to have consented to the proposed amendment under the consent solicitation.

If holders of a majority in aggregate principal amount of the notes have tendered their notes as of the expiration deadline, the related indenture for the notes will be amended promptly after the expiration date, giving the issuer the right to redeem all of the outstanding notes for a cash payment per note equal to the closing indicative note value on the valuation date specified by the issuer in the redemption notice. The redemption date will be the fifth business day after the valuation date.

Notes purchased under the tender offer will be immediately cancelled. Notes that have not been tendered or accepted for purchase will remain outstanding after the settlement date, subject to the redemption right if the consent solicitation is successful.

The issuer currently intends to carry out the proposed amendment right after the expiration of the tender offer and redeem all outstanding notes shortly after that.

Payment upon redemption may be greater than or less than the purchase price under the tender offer but will not include the tender premium or any amount in excess of the closing indicative note value on the valuation date of that redemption.

In a previous press release, Barclays pointed out that because the closing indicative note value is calculated based on the closing level of the underlying index, if the index closing level has declined as of the expiration date of the tender offer, the purchase price may be significantly less than it would otherwise have been had the purchase price been determined at a time prior to that decline or after the level of the index has recovered.

In addition, the notes may trade at a substantial premium to or discount from the closing indicative value. Accordingly, the purchase price may be lower than the trading price of the notes on the expiration date.

The bank is based in London.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.