Barclays ETN+ Select MLP Stock Price, News & Analysis

iPath Select MLP ETN (ATMP) is an exchange-traded note issued by Barclays Bank PLC. The ETNs are linked to the performance of the Volume-Weighted Average Price ("VWAP") level of the CIBC Atlas Select MLP Index (the "Index"). According to Barclays, the ETNs are listed for trading under the ticker symbol ATMP and are unsecured debt obligations of Barclays Bank PLC.

The Index that underlies the iPath Select MLP ETNs is designed to provide exposure to a basket of midstream U.S. and Canadian master limited partnerships, limited liability companies and corporations that trade on major U.S. exchanges. These Index constituents are classified in the GICS Energy Sector or GICS Gas Utilities Industry under the Global Industry Classification Standard ("GICS") and must meet specified eligibility criteria described in the ETN prospectus.

Index methodology and composition

The CIBC Atlas Select MLP Index follows a methodology described in the ETN prospectus. It is rebalanced on a quarterly basis. At the time described in the news release, the Index included 20 constituents and cash. The constituents are rebalanced on a capped, float-adjusted, capitalization-weighted basis across four Index business days starting on each rebalancing date. Constituent additions and deletions are not presented by Barclays as an opinion on the investment merits of the underlying securities.

The Index constituents are selected using the CIBC Select MLP Strategy developed by CIBC Private Wealth Advisors, Inc., acting as the Index Selection Agent. The Strategy dynamically selects a basket of up to 100 potential Index constituents based on factors such as long-term credit rating, the portion of cash flow driven by midstream operations, and size as measured by free-float market capitalization and average daily trading value. The Index Selection Agent provides the selected constituents to Barclays Bank PLC in its role as index sponsor.

Issuer and credit considerations

The iPath Select MLP ETNs are unsecured debt obligations of Barclays Bank PLC. Any payment at maturity or upon redemption depends on the ability of Barclays Bank PLC to satisfy its obligations as they come due. Barclays notes that the actual and perceived creditworthiness of Barclays Bank PLC can affect the market value of the ETNs before maturity or redemption. In the event of a default by Barclays Bank PLC, investors may not receive amounts owed under the terms of the ETNs.

Barclays describes itself as a British universal bank diversified by business, customer types, and geography. Its activities include consumer banking and payments operations around the world, as well as a full service global corporate and investment bank. These businesses are supported by a service company providing technology, operations, and functional services across the group. Investment banking products and services in the U.S. are offered through Barclays Capital Inc.

Risk characteristics of ATMP

Barclays highlights that an investment in the iPath Select MLP ETNs involves significant risks, including the possibility of losing some or all of the principal invested. The ETNs are described as riskier than ordinary unsecured debt securities and do not provide principal protection. Because the ETNs are subject to an investor fee and other applicable costs, the return on the ETNs will always be lower than the total return on a direct investment in the Index components.

The payment on the ETNs is linked to the VWAP level of the Index, rather than the official closing level of the Index or the published intraday indicative value of the ETNs. As a result, the amount received at maturity or upon early redemption may differ from what would be received if payments were determined by reference to the official closing Index level. Barclays also notes that the ETNs may exhibit high volatility and are considered speculative.

Income, fees, and coupons

Investors in the iPath Select MLP ETNs are not guaranteed to receive coupon payments. A coupon payment is made on a coupon payment date only if the accrued dividend exceeds the accrued investor fee on the relevant coupon valuation date. The accrued dividend depends in part on the aggregate cash value of distributions that a reference holder would have been entitled to receive in respect of the Index constituents prior to the relevant coupon valuation date. Investor fees and other costs have a negative effect on the value of the ETNs.

Sector and concentration exposure

The Index constituents for ATMP are companies in the Energy Sector or Gas Utilities Industry, as determined by the GICS classification system. Barclays notes that many of these constituents are smaller, non-diversified businesses that may face risks such as limited access to capital and competition from larger, better financed entities. Because of this concentration, the ETNs are susceptible to fluctuations in the energy and gas MLP market and may experience volatile increases and decreases in value as market confidence and perceptions regarding the constituents change.

Liquidity, redemption, and trading

Barclays states that although the ETNs are listed on an exchange, a trading market for the ETNs may not develop and liquidity may be limited. Barclays has the right to redeem or "call" the ETNs (in whole but not in part) at its sole discretion and without investor consent on any trading day from inception until maturity. In addition, investors who wish to exercise their right to redeem ETNs directly with the issuer must redeem at least a specified minimum number of ETNs at one time and comply with date and time restrictions set out in the pricing supplement.

The ETNs may be bought or sold on the exchange throughout the trading day through a brokerage account. Commissions may apply, and there can be tax consequences in the event of sale, redemption, or maturity of the ETNs. Barclays notes that aspects of the tax treatment of the ETNs may be less favorable than a direct investment in MLPs and may be uncertain.

Regulatory and reporting context

Barclays Bank PLC, as the issuer of the iPath Select MLP ETNs, files reports as a foreign issuer under the Securities Exchange Act of 1934. For example, a Form 6-K filing indicates that Barclays Bank PLC provides information to the London Stock Exchange and publishes regulatory reports such as its Pillar 3 Report. These regulatory disclosures relate to Barclays Bank PLC as a whole rather than specifically to ATMP, but they provide context on the issuer’s regulatory reporting framework.