This week's wrap covers structured products with strike dates between July 15-21, 2018. Structures reviewed include a life insurance from BNP Paribas in Belgium, autocallables from Citigroup and Societe Generale in the UK and France, respectively, and a capital protected note from Danske Bank in Finland. In the US, we saw a collaboration between Goldman Sachs and JP Morgan for a basket linked note with the latter also acting as the derivatives counterparty for Chugin Securities in Japan, while in Taiwan, BNP Paribas and UBS teamed up for a callable note.
EUROPE
One hundred and sixty structured products distributed across 12 different jurisdictions struck in Europe during the week.
Reyker Structured Investments is distributing Kick Out Product Plan K516 in the UK. The product, which offers a potential coupon of 6.70% p.a. depending on the performance of the FTSE 100 and Eurostoxx 50, gets a listing at Euronext Dublin. The plan is targeted at professionally advised retail investors and issued via Citigroup Global Markets. A fee payable by Citigroup to Reyker of up to 3% of the aggregate principle amount applies.
AG Insurance launched Smart Invest Bon European Brand Leaders 2028 in Belgium. The capital protected life-insurance (Class 23) has a term of 10-years and participates 75% in the Solactive Brand Finance European Leaders Low Risk 30 Index, with monthly averaging during the last 30 months of investment. The product is distributed via the BNP Paribas Fortis network and sold €24.9m during the subscription period. An annual management charge of maximum 1.50% applies.
Orelis Finance is marketing Rendement Oxygène Juillet 2018 in France. The 10-year product can be redeemed early every six-months (after the first anniversary) if the Euro iStoxx Equal Weight Constant 50 Index closes at or above its initial level on the semi-annual observation date. Societe Generale, as the issuer, will pay a remuneration of up to 0.80% p.a. on the total amount of the securities effectively placed by the distributor.
Danske Bank issued Indeksiobligaatio Vastuullinen Eurooppa 2 FECDA Maltillinen in Finland. The four-year capital protected medium-term note participates 70% in the positive performance of the MSCI Europe ESG Leaders Select Top 50 Dividend Index, subject to 12-month backend averaging. The product is listed in Ireland and issued at 105%. The issue price includes a structuring fee of up to 2% (0.50% p.a.) in accordance to the market situation at the start of the subscription period.
NORTH AMERICA
Thirty-eight structured products, split between Canada (nine) and the US (29), had strike dates in North America.
TD Securities launched series 2017 of its Equity Index-Linked Autocallable Coupon Notes in Canada. The seven-year product pays a fixed annual coupon of 5.7% providing the underlying S&P/TSX 60 Index closes at or above 75% of its initial level on the observation date. A selling commission of C$2.50 per note applies. In addition Toronto Dominion Bank will pay Desjardins Securities a fee of up to 0.15% of the aggregate issue price of the notes for acting as an independent agent.
UBS issued Trigger Phoenix Autocallable Optimisation Securities linked to the share of Netflix in the US. The two-year product pays a quarterly coupon of 9.66% p.a. if, on the observation date, the share does not fall by 40% or more from its initial level (400.48 on July 16). The securities sold US$285,000 and a commission of US$0.15 per note applies. The estimated initial value of the securities as of the trade date is set at US$9.59.
Also in the US, Goldman Sachs collaborated with JP Morgan Chase for the launch of Capped Buffered Enhanced Participation Notes linked to a weighted basket comprising Eurostoxx 50 (37%), FTSE 100 (23%), Topix Index Tokyo (23%), S&P/ASK 200 Index (8%) and Swiss Market Index (9%). The estimated value of the notes, when the terms are set, will not be less than $987.60 per $1,000 principal amount note.
MIDDLE EAST & AFRICA
Standard Bank launched the Protected Index Top 40 Note in South Africa. The five-year capital protected product offers 105% uncapped participation in the FTSE/JSE Africa Top 40 Index.
ASIA PACIFIC
Three hundred and ninety-two structured products struck in the Asia-Pacific region during the week. The products were split across three databases: China (19), Japan (10), South Korea (290) and Taiwan (73).
HSBC launched CNY Note S21, a six-month wealth management scheme linked to the Hang Sang Index, in China. At maturity the product pays a coupon equal to 3.7% p.a. pro-rated by the number of days during the investment period the closing price of the index stays at or above 65% of its initial level.
In South Korea, Shinhan Investment introduced DLS 827, a three-month credit-linked note linked to the credit worthiness of Samyang. If the company remains solvent, the product offers a fixed coupon of 2.1% p.a. However, if there is a credit event prior to maturity, the product terminates immediately offering an amount equal to the ISDA auction final price on the redemption date.
Chugin Securities is distributing Digital M20200717 in Japan. The two-year product offers a fixed coupon of 9.1% p.a. for the first quarter of investment and thereafter a quarterly coupon of the same amount if the shares of Daifuku and Nidec close at or above 80% of their strike levels on the observation date. The bond of this product is issued via Municipality Finance and JP Morgan Chase acts as the derivatives counterparty.
BNP Paribas joined forces with UBS for the launch of callable note 092001534002 in Taiwan. The unlisted registered note, which has a term of one-year and is denominated in US dollars, is linked to a basket of shares. The product is targeted at private banking investors.