BOSTON, May 30, 2012 /PRNewswire/ -- Eaton Vance
Corp. announced today the initial public offering of eUnits™ 2 Year
U.S. Market Participation Trust II: Upside to Cap / Buffered
Downside (the "Trust"). The Trust is issuing 2,000,248 units
of beneficial interest ("Units") at $10 per Unit. Units begin trading today on
NYSE MKT under the symbol "ETUB." This offering follows the
initial public offering of eUnits™ 2 Year U.S. Market Participation
Trust: Upside to Cap / Buffered Downside (NYSE MKT: ETUA) on
January 26, 2012.
eUnits™ are exchange-traded structured investments that seek to
enable holders to participate in the returns of a specified market
benchmark over a defined term, typically up to a cap, while
reducing exposure to loss in the event of a decline in the
benchmark. Market exposures are provided by combining
third-party dealer contracts with a portfolio of term-matched U.S.
Treasuries. Different from structured notes, eUnits™ are
registered under the Investment Company Act of 1940 as closed-end
investment companies and avoid a concentrated credit exposure to a
single corporate issuer. Unlike traditional closed-end funds,
eUnits™ are fixed-term instruments with substantially fixed
holdings, and seek to mitigate secondary market trading discounts
by facilitating arbitrage versus a disclosed hedge portfolio using
a methodology that is the subject of a pending U.S. patent.
The Trust seeks to provide purchasers of Units in the initial
public offering the opportunity to earn returns over the investment
life of the Trust based on the price performance of the S&P 500
Composite Stock Price Index® (the "Index"). If the Index
appreciates over the investment life of the Trust, the Trust seeks
to provide a return on the initial net asset value of the Units
equal to the percentage change in the price of the Index, up to a
maximum return of 20.5 percent. If the Index declines over the
investment life of the Trust by 15 percent or less, the Trust seeks
to return the initial net asset value of the Units. If the Index
declines by more than 15 percent, the Trust seeks to outperform the
Index price change by 15 percent of initial Index value. There can
be no assurance that the Trust will achieve its investment
objective. The Trust anticipates concluding its
investment activities on or about May 21,
2014 (the "Termination Date") and making a liquidating cash
distribution to Unit holders of the Trust's net assets within seven
business days thereafter.
The Trust's investment program consists primarily of: (1)
investing substantially all of the initial net assets of the Trust
to purchase U.S. Treasury obligations that will mature on or
shortly before the termination date of the Trust and (2) entering
into private contracts (the "Contracts") that provide for the Trust
to pay or receive cash at Contract settlement based on the price
performance of the Index over the life of the Contracts, which are
scheduled to conclude on the termination date of the Trust. Through
payoff profiles embedded therein, the Contracts seek to provide
exposure to the price performance of the Index corresponding to
that which the Trust seeks to provide Unit holders. The Trust has
entered into the Contracts with three global financial institutions
or their affiliates, with each counterparty rated investment grade.
The Trust's exposure to counterparty risk is limited to the
in-the-money value of its Contract positions and mitigated by the
anticipated daily posting of collateral.
Eaton Vance Distributors, Inc. ("EVD") was the underwriter of
the offering and Eaton Vance Management ("EVM") is the Trust's
investment adviser and administrator. Parametric Risk
Advisors LLC ("PRA") is sub-adviser responsible for providing
advice on and execution of the Contracts. EVD and EVM are
wholly-owned subsidiaries, and PRA is an indirectly majority-owned
subsidiary of Eaton Vance Corp. PRA is a leading manager of
investment programs utilizing equity and equity index options.
Eaton Vance Corp. is one of the oldest investment management
firms in the United States, with a
history dating back to 1924. Eaton Vance and its affiliates managed
$197.5 billion in assets as of
April 30, 2012, offering individuals
and institutions a broad array of investment strategies and wealth
management solutions. The Company's long record of providing
exemplary service, timely innovation and attractive returns through
a variety of market conditions has made Eaton Vance the investment
manager of choice for many of today's most discerning investors.
For more information about Eaton Vance, visit
www.eatonvance.com.
This news release contains statements that are not historical
facts, referred to as "forward looking statements." Actual future
results may differ significantly from those stated in any forward
looking statements, depending on factors such as changes in
securities or financial markets or general economic conditions, the
continuation of investment advisory, administration, and service
contracts, and other risks discussed from time to time.
SOURCE Eaton Vance Corp.