The initial public offering of MacroShares Major Metro Housing Up and MacroShares Major Metro Housing Down is scheduled to run from 1pm on 28 April through 1pm on 5 May Eastern Standard
The initial public offering of MacroShares Major Metro Housing Up and MacroShares Major Metro Housing Down is scheduled to run from 1pm on 28 April through 1pm on 5 May Eastern Standard Time.
The initial offerings of both UMM and DMM will occur simultaneously via an electronic auction process managed by WR Hambrecht.
MacroMarkets’ subsidiary, Macro Housing Depositor, doubled the number of shares being offered during the IPO to 20 million shares of UMM and 20 million shares of DMM for a total offering size of USD1bn. The firm says the increased offering amount is a result of the high level of interest voiced by the investor community.
On 11 May the securities will be listed for trading on NYSE Arca once the IPO is completed.
Sam Masucci, president and chief executive of MacroMarkets, says: ‘US residential real estate is the largest unsecuritized asset class in the world. MacroShares Major Metro Housing will open up this large and important asset class to the global investor community.’
‘Our current financial crisis is due to a failure to manage housing risk,’ says economist and MacroMarkets’ co-founder, Robert Shiller. ‘MacroShare Housing products will begin to fill this massive void. MacroShares Major Metro Housing Up and Down are market-based solutions to this unprecedented financial crisis.’
MacroShares Major Metro Housing will provide investors with access to the housing asset class, allowing for investment in either the upward or downward movement of home prices. The securities are designed to track the change in US home prices as measured by the S&P/Case-Shiller Composite-10 Home Price Index.
The paired securities will have a five and a half year term and will feature a 3x (300 per cent) leverage factor.
The Major Metro Housing trusts will be fully-collateralized by short-term US Treasury Bills, overnight repurchase agreements secured by Treasury securities, and cash.
UMM and DMM were designed to offer US housing exposure with exchange traded liquidity but without issuer and counterparty credit risk. The trusts generate quarterly distributions for MacroShares’ investors when interest income exceeds trust expenses.
