3rd Nov 2009 16:49
ETFS COMMODITY SECURITIES LIMITED
(Incorporated and registered in Jersey under the Companies (Jersey) Law 1991 (as amended) with registered number 90959)
(the "Issuer")
Notice regarding ETFS Leveraged Natural Gas Individual Securities
Following recent falls in the price of natural gas, the Price of ETFS Leveraged Natural Gas Individual Securities ("LNGA") has fallen below its Principal Amount of US$1.61 to US$1.47 as at 3rd November 2009. As a result of this fall in Price, the Issuer is preparing a circular to the holders of ETFS Leveraged Natural Gas Individual Securities convening a meeting for the purposes of seeking approval from Security Holders to reduce the Principal Amount of LNGA.
Prior to the proposed meeting of Security Holders the Issuer may, under Condition 7.18 of the Securities, suspend the right to Redeem any such Securities under Condition 7.1(a) (Settlement Pricing) whose Price falls below the Principal Amount. If this occurs, redemptions under Condition 7.1(b) (Agreed Pricing) will continue to occur normally. This procedure has been designed to ensure that all Security Holders who are able to redeem Securities, can each continue to receive a price for their Securities based on the relevant Commodity Index.
As the Price of LNGA has fallen below its Principal Amount of US$1.61, the right to Redeem such securities under Condition 7.1(a) (Settlement Pricing) has been suspended under Condition 7.18 until further notice. To enable normal Redemptions to continue all Redemptions under Agreed Pricing for LNGA will, unless otherwise agreed, be based on the settlement price of the Relevant Contract and the pricing formula as stated in the Prospectus. This will allow the creation and redemption of the Securities to continue unaffected. Accordingly the Issuer does not expect any disruption to trading in the ETFS Leveraged Natural Gas Individual Securities.
The Issuer intends to terminate the temporary suspension of Redemption by Settlement Pricing once the Issuer has received approval from the Security Holders to reduce the Principal Amount as provided for in the circular to be issued in due course. The proposed meetings will not affect Security Holders of other Commodity Securities including Classic Commodity Securities, Forward Commodity Securities, Short Commodity Securities and other classes of Leveraged Commodity Securities.
Security Holders should note that the current circumstances are contemplated in the Prospectus, should there be significant falls in commodity prices and the relevant commodity indices. This notice bears no relation to the recent announcements made by other exchange traded fund providers that they will stop issuing shares due to concerns over Commodity Futures Trading Commission (CFTC) limits. It is intended that the creation and redemption of ETFS Leveraged Natural Gas Individual Securities will continue unaffected.
A further announcement will be made in due course.
For further information, please contact
Christopher Osgood,
Computershare Investor Services (Channel Islands) Limited
Tel: +44 (0) 1534 825282
Fax: +44 (0) 1534 825335
E-mail address: [email protected]
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