This week's wrap covers structured products with strike dates between August 12-18, 2018. Structures reviewed included life wrapped products from KBC and Natixis in Belgium and France, respectively. Natixis also had a presence in the UK where it partnered with Reyker while Leonteq targeted Swiss investors with a dollar denominated bonus certificate. In the US, we saw a collaboration between Barclays and Morgan Stanley and in Japan, JP Morgan provided the derivatives for a Next Funds Nikkei 225 Leveraged Index ETF-linked note from SBI.

EUROPE
One hundred and eighty-three structured products distributed across 13 different markets struck in Europe during the week.

KBC introduced Life MI+ World 90-2, a 3.5-year unit-linked life insurance (Class 23), in Belgium. The product participates 100% in a basket of 30 global shares, subject to a minimum capital return of 90% and a maximum capital return of 118%. The fund invests in a bond (or bonds) specifically issued for it by Arcade Finance, a special purpose vehicle. A management fee of maximum 2.4% per annum applies.

Aviva collaborated with Natixis for the launch of Actio Rendement 2018 in France. The eight-year autocallable, which is eligible as a life-insurance contract, will be redeemed early if the underlying Eurostoxx 50 is at or above its strike level on the valuation date. The product is also available via Ufifrance Patrimoine and gets a listing on the Luxembourg Stock Exchange. Intermediaries are paid a maximum annual commission of 1.1%pa. of the nominal amount.

Natixis was also active in the UK. The French bank teamed up with Reyker for FTSE 100 Kick Out Plan August 2018 for a 10-year product targeted at professionally advised retail investors. The product could accumulate 10% growth for each annual period that it is held. The plan has a 60% European barrier and Reyker has purchased the investment at a wholesale discount which represents the distribution fee and typically ranges from 1% to 2%.

In Italy, Deutsche Bank launched five-year phoenix certificates linked to the Eurostoxx Banks index. The product offers a fixed coupon of 5.75% pa. if, on any of the observation dates, the index is at or above its initial level. The product is listed on the multilateral trading facility EuroTLX and a placement fee of up to 4% of the issue price applies.

Leonteq distributed a three-year bonus outperformance certificate as a public offer in Switzerland. The product is denominated in US dollars and participates 250% in the positive performance of the share of Roche. A distribution fee of up to 0.33% pa. applies and the product is listed on the Six Swiss Exchange.

NORTH AMERICA
Thirty-one structured products, split between Canada (24) and the US (seven), had strike dates in North America.

Scotiabank issued a callable contingent coupon note in Canada. The product pays annual income of 6.7% per annum providing an equally weighted basket comprising the shares of Citi, Bank of America, JP Morgan Chase, Morgan Stanley and Wells Fargo stays at or above 70% of its initial level on the valuation date. A selling concession fee of 2.75% of the principal amount will be payable to investment dealers.

HSBC Bank launched Growth Opportunity Averaging CD in the US. The four-year certificate of deposit participates 100% in the rise of an equally weighted basket comprising Eurostoxx 50, Hang Seng Index and S&P 500, subject to an overall minimum capital return of 104%. A placement fee of up to 2.525% of the prinicipal amount applies and the estimated initial value is between US$930 and US$970 per CD.

Also in the US, Morgan Stanley Wealth Management joined forces with Barclays Bank for Partial Principal at Risk Securities (06746T219). The two-year product is linked to the MSCI Europe which covers approximately 85% of the free float-adjusted market capitalisation across the European developed markets equity universe. The minimum capital return is 95% and financial advisers receive a fixed sales commission of US$0.20 for each security they sell. A structuring fee of US$0.05 also applies while the estimated value on the pricing date is expected to be between US$9.464 and US$9.664 per security.

ASIA PACIFIC
One-hundred and forty-seven structured products struck in the Asia-Pacific region during the week. The products were split across four databases: China (15), Japan (five) South Korea (74) and Taiwan (53).

Agricultural Bank of China issued Bearish CNY Note 116, a six-month wealth management scheme, in China. The capital protected product pays a fixed coupon of 5.1% pa. at maturity if the closing price of the CSI 300 Index is at or below its initial price.

SBI Securities is distributing Digital M20200814 in Japan. The registered note pays a fixed coupon of 10% pa. for the first quarter of investment, and thereafter a quarterly coupon of the same amount if the underlying Next Funds Nikkei 225 Leveraged Index ETF closes at or above 85% of its initial price. Otherwise the coupon is set at 0.1% pa. The bond for this product is issued by Municipality Finance. JP Morgan Chase acts as the derivatives manufacturer.

In South Korea, Dongbu Securites launched DB Happy Plus ELS 2027. The three-year product can be redeemed early, at the end of each quarter, if the Kospi 200 Leverage Index is at or above a predetermined level of its initial level. In that case the product offers 100% capital return plus a coupon of 2.14% per quarter elapsed.

DBS Bank introduced a 12-month memory autocallable range accrual note targeted at private banking investors in Taiwan. The product is denominated in US dollars and linked to a basket comprising two exchange-traded funds: iShares MSCI Brazil Capped ETF and SPDR S&P Metals & Mining ETF.