UBS Investment Bank has expanded its ETRACS Exchange Traded Notes (ETN) platform by adding the new ETRACS 2xLeveraged Long Wells Fargo Business Development Company Index. It began trading today on NYSE Arca under the ticker symbol, BDCL, and provides leveraged exposure to Business Development Companies through a single investment.
“We are excited to add this ETN to our growing family of ETRACS ETNs. This new ETRACS 2xLeveraged Long Wells Fargo Business Development Company Index is particularly useful for investors seeking exposure to the BDC space and with 2X leverage, the Current Annual Leveraged Yield is 14.57%*,” says Christopher Yeagley, Managing Director and US Head of Equity Structured Products. “This ETN follows our successful launch of the Wells Fargo Business Development Company Index ETN (Ticker: BDCS), the first exchange traded product giving exclusive exposure to BDCs, on April 28, 2011. It is our third ETN with Wells Fargo and we are pleased to partner with them once again.”
BDCs are public vehicles that invest in private equity and debt and were created to increase financing available to small businesses. They function much like private equity funds, although BDCs allow various investors, regardless of size, to participate. A BDC lends to small and midsized companies at high yield equivalent rates and often takes equity stakes in these companies.
The Wells Fargo Business Development Company Index is comprised of 26 BDCs and is a float adjusted, capitalisation-weighted index that is intended to measure the performance of BDCs that are publicly listed and satisfy specified market capitalisation and other eligibility requirements.