eUnits 2 Year trust amends cap to 17%-23% on units linked to S&P 500

By Susanna Moon

Chicago, Dec. 22 - eUnits 2 Year U.S. Market Participation Trust: Upside to Cap / Buffered Downside registered to sell shares linked to the S&P 500 Composite Stock Price index in an N-2 filing with the Securities and Exchange Commission.

In the most recent filing, the maximum return for any gains on the index was revised to 17% to 23%.

The trust filed plans to sell the units on Dec. 7 in an amended N-2 filing with the SEC.

The trust first announced plans to issue units on Sept. 20, 2010. At the time, it was called the eUNITs 2 Year U.S. Equity Market Participation Trust: Enhanced Upside to Cap / Buffered Downside.

The initial net asset value was $10 per unit.

The units will price after the beginning of the year. The trust plans to conclude its investment activities on Jan. 24, 2014, at which time it will distribute its net assets to the unitholders.

The trust seeks to provide a return equal to any percentage increase in the index, up to a cap of 17% to 23%, which was revised from 15% to 20%. Unitholders will receive only the initial net asset value of the units if the index declines by 15% or less and will lose 1% for every 1% that the index declines beyond 15%.

When the trust first announced plans for the units, it expected the cap to be 22% to 26%.

The trust will purchase Treasuries and futures contracts on the index with tenors that are the same as the expected investment life of the trust. The contracts will be structured so that the trust will receive cash from the counterparties if the index increases over the term of the contracts. The trust will have to pay cash to the counterparties if the index decreases by more than 15%.

The trust has applied to list the units on NYSE Arca under the symbol "ETUA."

Eaton Vance Distributors, Inc. is the underwriter. Units placed to fee accounts will be offered at $10.00 each. Those placed to non-fee accounts are subject to a sales load of $0.20 each and will be offered at $10.20 each.

Eaton Vance Management is the investment adviser and administrator. Parametric Risk Advisors LLC is the subadviser. The units are subject to an annual management fee of 0.75%.

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