I've held BSR (BearStearns Alerian MLP ETN) for about 2 years now to try to capture the MLP segment. We all know that BearStearns was taken over by JPMorgan. Early March, JPMorgan released AMJ that looked nearly the same but with the JPM branding. Then in May, they announced they would delist BSR. Well I've been busy so I missed the news. So a few weeks ago, I log into my brokerage account and see:
073902835, BEAR STEARNS COS INC BEARLINX ALERIAN MLP SELECT INDEX ETN CPN 0.000 DUE 07/20/27 DTD 07/20/07 FC 08/08/07
No way to buy and sell online anymore as it appears to have turned into a bond due to mature in 2027. I spent some time Googling up how others were dealing with this. The news was generally bad. JPMorgan's official response was for BSR owners to open up a JPM brokerage account, transfer the assets over and JPM would redeem it for you. Umm -- no thanks?
After some more searching, I did run across one message saying Fidelity's bond desk was able to sell their holdings at a 10% discount. Sucks but I decided to give it a try and called up Wells Fargo trading line. After about 30 minutes on the phone (mostly waiting on hold), the WF rep said he could ask for a bid from their bond trading desk and see what they could do. About an hour later, he called me back and said he was able to get a bid for $28.62. I had already done the math based on BSR vs AMJ closing price on 6/12 and it looked like I would be selling at a 2.3% discount. No brainer decision here -- immediately gave confirmation to sell. Even better was WF charged no commissions.
I definitely will avoid ETNs from now on.
(Filed in investing)
BSR = why ETNs suck
Posted by Mossy
September 21, 2009 12:08 PM
073902835, BEAR STEARNS COS INC BEARLINX ALERIAN MLP SELECT INDEX ETN CPN 0.000 DUE 07/20/27 DTD 07/20/07 FC 08/08/07
No way to buy and sell online anymore as it appears to have turned into a bond due to mature in 2027. I spent some time Googling up how others were dealing with this. The news was generally bad. JPMorgan's official response was for BSR owners to open up a JPM brokerage account, transfer the assets over and JPM would redeem it for you. Umm -- no thanks?
After some more searching, I did run across one message saying Fidelity's bond desk was able to sell their holdings at a 10% discount. Sucks but I decided to give it a try and called up Wells Fargo trading line. After about 30 minutes on the phone (mostly waiting on hold), the WF rep said he could ask for a bid from their bond trading desk and see what they could do. About an hour later, he called me back and said he was able to get a bid for $28.62. I had already done the math based on BSR vs AMJ closing price on 6/12 and it looked like I would be selling at a 2.3% discount. No brainer decision here -- immediately gave confirmation to sell. Even better was WF charged no commissions.
I definitely will avoid ETNs from now on.
(Filed in investing)
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