MacroMarkets to pull the plug on MacroShares

MacroMarkets LLC announced today the termination of the MacroShares $100 Oil Up Trust (UOY) and the MacroShares $100 Oil Down Trust (DOY), due to assets on deposit falling to less than $50 million. Their respective registration statements provide for a termination when “the amount of cash and Treasuries on deposit in the down trust and/or up trust is less than $50 million per trust on any business day and we elect, in our discretion, to terminate the paired trusts.” The trusts — which are similar to exchange traded funds — will continue to trade until June 25. On July 6, a final distribution payment will be made to shareholders of record, based on the underlying value of the trusts. The termination of the trusts is the second time that MacroMarkets of Madison, N.J., has had to kill off its oil trusts. With Claymore Securities Inc. of Lisle, Ill., acting as marketing agent, the firm launched the MacroShares Oil Up Trust and the MacroShares Oil Down Trust in November 2006. The partnership was dissolved, however, in November 2007. Industry experts have speculated that the split had to do with the fact that MacroShares surprised almost everyone by trading at wide discounts and premiums to net asset value — something that few investors thought would happen. MacroShares stopped trading in April 2008 because oil prices rose to the point of triggering a built-in early-termination event within the trusts. MacroMarkets is in the midst of an initial public offering of MacroShares Major Metro Housing Up (UMM) and MacroShares Major Metro Housing Down (DMM). After the IPO, the trusts will be listed on NYSE Arca. The two trusts are designed to track the change in U.S. home prices as measured by the Standard & Poor’s/Case-Shiller Composite of 10 Home Price Index. The paired securities will have a five-and-a-half-year term and will feature a 300% leverage factor.