ETFWorld.co.uk

Commodity Securities to be Collateralised

CALCOLATRICE 2

An important issuer of Exchange Traded Commodities annunced the collateralisation of the Commodity Securities …

 

 

 

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:

 

  1. 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

  2. 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.

 

Source:ETFWorld.co.uk – ETFSecuritie

 

 

 

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