Vol ETF Terminations Begin: Nomura Announces Early Redemption Of VIX ETN

While we await news on whether Credit Suisse will (or won’t) terminate the retail-favorite XIV ETN, following its historic, 90% collapse, some other ETF/ETN providers are starting to terminate their VIX-linked offerings.

Moments ago, Nomura Europe Finance said the Next Notes S&P500 VIX Short-Term Futures Inverse Daily Excess Return Index ETN will be redeemed early, after a condition for early redemption was triggered due to movements in the underlying index. The underlying index on the ETN is the S&P500 VIX Short-Term Futures Inverse Daily Excess Return Index

The ETN in question, 2049.JT has not yet open, and based on this announcement, it looks like it won’t.

This is the full announcement concerning the VIX-linked ETF, google translated:

Announcement concerning the determination of early redemption of foreign index-linked securities “2049 NEXT NOTES S & P 500 VIX Inverse ETN” which is the listed ETN listed trust beneficiary certificate (hereinafter referred to as “ET “S & P 500 VIX Short-term Futures Inverse Daily Index Coordinated Bond” (hereinafter referred to as “ETN”), which is a foreign asset-backed securities, which is a trust property of N / JDR, is subject to an early redemption clause. We will inform you that it will be redeemed early.

1) Applicable to early redemption clause (Including the closing price) in the US market of the “S & P 500 VIX Short-Term Futures Inverse Daily Index” (hereinafter referred to as “the index”), which is the subject index of the ETN, is closing the closing price of the relevant index value % Or less, the ETN will be redeemed early on the day after 10 business days of the day (“early termination date”) that it realized. On February 5 the relevant index value is closing, the closing price of the relevant index on February 2 It fell to 268,517.46 or less, which is equivalent to 20% of 1,342,587.30, so it will be redeemed at an early date.

2) Early redemption amount Based on the amount equivalent to the value of the ETN as of the early termination date calculated by the calculation agent in its sole discretion in accordance with the following formula for the face value of 10,000 yen of the ETN in a commercially reasonable manner by such redemption (Excluding, but not limited to) the expenses related to the cancellation of related hedge transactions that the Company has borne. 10,000 yen × (redemption price / 100)

Provided, however, that the redemption amount received by the holder as of the ETN JDR trust finish date shall be equal to the payment fee from the early redemption amount to the trustee of said ETN J DR and the equivalent amount of withholding tax, It is deducted from trust fee. We will disclose details of the ETN JDR and details of the handling of said ETN in the future as soon as it is confirmed. We sincerely apologize for the inconvenience caused to our holders.

And the full, original announcement: