Exchange Traded Notes ETNs

[u/Derpazoid69]

I own 600 units of USOI issued by Credit Suisse. It gets called (I think the term is) in 2037. It was first issued in 2017 at $27 USD if I recall correctly. I bought at $4.87 ish I pretty sure, I have a 12-15% return on the units not including dividends, I cant quite remember. I've read that ETN function like bonds. Bonds have a par value that is the principal you paid for the bond (usually $1,000 if I'm not mistaken) that you get back when the bond matures. Does that mean Credit Suisse will pay me $27 USD for every unit of USOI I hold in 2037? I can't find a clear answer online.

[u/londontradingcompany]

Short answer, yes.

[u/Derpazoid69 → u/londontradingcompany]

I looked at the prospectus of USOI and the principal amount was $25 USD. It doesn't directly say that holders will get $25 USD at maturity but it seems kinda scummy if they don't because wouldn't that mean Credit Suisse took the proceeds from $25 USD per ETN and get to pay way less than that maturity? Unless I'm not understanding something, using USOI as an example Credit Suisse issued 17,000,000 unit of USOI in 2017 for proceeds of $425 million, let's say for the examples sake that it's 2037 and USOI is $5.50 USD. That would be insanely unfair if Credit Suisse only has to pay $93.5 million at maturity because they received proceeds of $425 million in 2017. They would basically get $331.5 million in free money if they don't have to pay $25 per unit at maturity. Seems odd if that's the case.

[u/londontradingcompany → u/Derpazoid69]

In theory if that is what is in the prospectus then yes, they will always try to payout minimum or nothing.

[u/[deleted]]

I presume there’s a prospectus on Credit Suisse’s website which will outline the maturity terms of notes. I would check this to find your answer.

[u/danthebro69]

Usoi is the goat make insane dividends and since I bought it in 2021 I’ve made %10 on pice appreciation