9th Oct 2008 09:25
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR TO THE GENERAL PUBLIC IN THE UNITED KINGDOM OR JERSEY.
Announcement Thursday 9 October 2008
Commodity Securities to be Collateralised
ETF Securities Limited ("ETF Securities") is pleased to make the following announcement regarding the securities ("Commodity Securities") issued by ETFS Commodity Securities Limited ("CSL"), which are backed by matching contracts from AIG Financial Products Corp. ("AIGFP") whose obligations to CSL are guaranteed by American International Group, Inc (collectively with AIGFP, "AIG").
AIG and CSL have signed agreements between each other and with The Bank of New York Mellon ("BNY Mellon") pursuant to which:
Pursuant to its agreement with CSL, AIG is required to post collateral covering not less than 100% of the daily mark-to-market value of all Commodity Securities in issue; and
BNY Mellon, in its role as collateral manager, will hold the collateral in a separate account, into which AIG must deposit the collateral and over which CSL may take control by delivering to BNY a notice of exclusive control.
Once BNY Mellon opens accounts in the applicable local markets for receipt of initial collateral, the agreements require AIG to complete the transfer of such collateral within three business days and thereafter to transfer additional collateral if, at the time BNY Mellon performs its daily mark-to-market, the value of the collateral in the account has fallen below the value of all Commodity Securities in issue.
The collateral will be valued each day by BNY Mellon utilising generally recognized pricing information vendors. The collateral may include cash, certain government debt obligations and other debt obligations rated not lower than AA by Standard and Poor's (or equivalent rating by another generally recognized ratings service) and the mix of collateral is subject to a number of concentration limits.
Further information about the agreements and the collateral rules thereunder will be included in supplementary prospectuses, which we hope to lodge with the UK Listing Authority within the next few days and to publish once approved by them.
We wish to re-iterate that AIG has continued at all times to honour all of its obligations with regard to Commodity Securities, including processing all creations and redemptions in the usual manner and paying all redemptions due on time.
Conference Calls
Once the supplementary prospectuses are published, ETF Securities will host a conference call to discuss the details of the collateralisation of Commodity Securities.
Details of the call will be available on the ETF Securities website and in response to email enquiries to [email protected]
For further information, please contact:
Graham Tuckwell, Chairman, ETF Securities Ltd
Hector McNeil, Head of Sales, ETF Securities Ltd
Tel: +44 20 7448 4330
Roman Townsend, Penrose Financial Tel: +44 20 7786 4875
This release does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any transferable securities to be issued by the ETF Securities Limited group ("ETFS"), nor shall it or any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto. Any offer, invitation or solicitation shall be made solely by means of a prospectus and recipients of this release who are considering a purchase of securities are reminded that any such purchase should be made solely on the basis of the information contained in such prospectus and any supplementary prospectus(es). This release does not constitute any recommendation regarding the securities of ETFS. The communication of this release is not being made by, and this release has not been approved by, an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000 (the "FSMA"). Accordingly this release is not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of this release or any other document issued in connection with the offer and sale of any ETCs is only being made to and directed at those persons in the United Kingdom falling within the definition of Investment Professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), or high net worth entities, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(1) of the Order or any person to whom it may otherwise lawfully be made (all such persons together being referred to as "relevant persons"). The communication of this release (or any other document issued in connection with the offer and sale of the ETCs) must not be acted upon or relied upon by persons who are not relevant persons. Persons distributing this release must satisfy themselves that it is lawful to do so. All applicable provisions of the FSMA must be complied with in respect of anything done in relation to the ETCs in, from or otherwise involving the United Kingdom. This is not an offer of securities for sale in the United States. Securities issued by the ETFS group ("Securities") have not been and will not be registered under the US Securities Act or any other applicable law of the United States. These Securities are being offered and sold only outside the United States to non-US persons in reliance on the exemption from registration provided by Regulation S of the US Securities Act. The Issuer has not been and does not intend to become registered as an investment company under the Investment Company Act and related rules. These Securities and any beneficial interest therein may not be reoffered, resold, pledged or otherwise transferred in the United States or to US persons. If the Issuer determines that any Security Holder is a Prohibited US Person (being a US Person who is not a "qualified purchaser" as defined in the Investment Company Act), the Issuer may redeem the Securities held by that Security Holder in accordance with the provisions described in the Prospectus. The Securities may not be purchased with plan assets of any "employee benefit plan" within the meaning of section 3(3) of the United States Employee Retirement Income Security Act of 1974, as amended ("ERISA"), any "plan" described in section 4975(e)(1) of the United States Internal Revenue Code of 1986, as amended (the "Code") or any entity whose underlying assets include "plan assets" of any of the foregoing by reason of an employee benefit plan's or other plan's investment in such entity, which employee benefit plan, plan or entity is subject to Title I of ERISA or section 4975 of the Code or any United States Federal, state, or local law or non-United States law that is substantially similar to the prohibited transaction provisions of section 406 of ERISA or section 4975 of the Code (any such employee benefit plan, plan or entity, a "Prohibited Benefit Plan Investor"). If the Issuer determines that any Security Holder is a Prohibited Benefit Plan Investor, the Issuer may redeem the Securities held by that Security Holder in accordance with the provisions described in the Prospectus relating to those Securities." "Dow Jones," "AIG®" "Dow Jones-AIG Commodity IndexSM," "DJ-AIGCISM", "Dow Jones-AIG Commodity 3-Month Forward Index" are service marks of Dow Jones & Company, Inc. and American International Group, Inc. ("American International Group"), as the case may be, and will be licensed for use for certain purposes by ETF Securities Ltd. ETCs based on the DJ-AIGCISM or related subindices (including single commodity sub-indices) or 3-Month Forward Indexes are not sponsored, endorsed, sold or promoted by Dow Jones, AIG Financial Products Corp. ("AIG-FP"), American International Group, or any of their respective subsidiaries or affiliates, and none of Dow Jones, AIGFP, American International Group, or any of their respective subsidiaries or affiliates, makes any representation regarding the advisability of investing in such product(s).
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