Another Credit Suisse Oil ETN Wiped Out After Historic Drop

(Bloomberg) -- Credit Suisse Group AG told investors in a leveraged exchange-traded note that tracks the price of oil they probably won’t get any money back after the value of the note dropped below zero.

The intraday indicative value of the Swiss bank’s VelocityShares Daily 3x Long Crude Oil exchange-traded note, or UWTIF, was equal to or less than $0 as of Tuesday, according to a statement from the bank. Accordingly, “holders of the ETNs will not receive any payments” on the notes, Credit Suisse said.

Earlier this month, Credit Suisse issued a similar statement for its VelocityShares Daily 3x Inverse Crude exchange-traded note, which let investors bet on falling oil prices.

Oil futures turned negative on Monday for the first time in history as a glut in supply collided with an abrupt decline in demand following lockdowns across the world’s major economies. That’s left investors struggling to exit futures contracts and sent exchange-traded funds that track oil into a tailspin.

Read more: Citigroup, UBS Liquidate Triple-Leveraged Oil ETNs Amid Whiplash

Holders of the Credit Suisse ETNs won’t receive any payout at maturity, if the ETN is called or if they attempt to redeem. Credit Suisse said that it expects the closing indicative value of the ETNs on all future days to be $0.

WisdomTree also today said it is closing a leveraged exchange-traded product. The WisdomTree WTI Crude Oil 3x Daily Short product has been suspended and will be delisted following “a severe overnight gap event,” according to a statement from the issuer.

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