Barclays Bank PLC Announces Reverse Split Of The iPath S&P 500 VIX Short-Term Futures ETN (VXX)
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.
“Specific Terms of the ETNs—Split or Reverse Split.”
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.