Compulsory redemption of WisdomTree Nickel 3x Daily Leveraged on 21 March 2022
WisdomTree Commodity Securities Limited today announced that WisdomTree Nickel 3x Daily Leveraged (3NIL) will be compulsorily redeemed.
The extreme and continual adverse movement in nickel prices since the 7 March 2022 has led to a restrike process being triggered on the morning of Monday 21 March 2022. Please see the earlier announcement below for further details. During this restrike process the product’s value fell to zero, leading the swap counterparties to terminate the swaps underlying the product. The product will now be closed with a value of zero.
The limitation on trading imposed on the nickel market by the LME after 7 March 2022 led to severe disruptions in nickel trading and pricing, which prevented the product from being priced and resetting its leverage at the end of each day as usual. This disruption is what led, as per the conditions of the Prospectus, to price movements triggering restrikes and knock-outs being measured from the close of 7 March 2022 rather than daily, as would otherwise be the case.
Nickel Pricing Disruption
Below is a summary of each day’s move in the relevant nickel future over the relevant period:
- 8 -15 March 2022: All Nickel futures contracts carried over the 07 March 2022 end of day settlement price as a reference point.
- On March 16 2022 the index decreased by around 5%, as the LME limit down was 5%.
- On March 17 2022 the index decreased by around 8%, as the LME limit down was 8%.
- On March 18 2022 the index decreased by around 12% as the LME limit down was 12%.
- On March 21 2022 the index decreased by around 15% as the LME limit down was 15%.
Therefore the index has decreased by 34.6% from the closing level of the index on the 7 March 2022. As the index has decreased by 34.6%, and the value of the product is leveraged 3x, the Calculation Agent determined the value of the product was zero or less, causing the impacted product to be terminated in accordance with the conditions set out in prospectus.
Application has been made to the London Stock Exchange, Borsa Italiana and Euronext, Dublin where the WisdomTree Nickel 3x Daily Leveraged securities are listed to request that they are to be suspended with immediate effect and delisted. The Redemption Amount of the WisdomTree Nickel 3x Daily Leveraged securities has been calculated as zero so investors should not expect to get paid for the securities they hold.
Impacted product:
+ WisdomTree Nickel 3x Daily Leveraged (3NIL)
For full details of the announcements:
+ RNS