In a first for the Mexican market, Banco Santander has launched a three-year structured bond linked to the Ibex35, Spain's primary stock index.
According to SRP data, this is the first time that any bank has used this index as an underlying for a structured note in the Mexican market.
The Call Spread Index Bond - 33.78% pa - 16 October 2012 raised MXN20m ($1.53m) during its offer period at the beginning of last month.
The product offers a capital return of 100% at maturity, only if the underlying is lower than 7,652.4 points. If the underlying is greater than 7,652.4 points and lower than 9,948.12 points, the product will repay the initial investment plus a participation of 112.6% on the underlying rise above the 7,652.4 capped at 33.78%. If the underlying is equal to or greater than 9,948.12 points, the product offers a capital return of 100% plus 33.78% per annum.
SRP data shows 4,886 products linked to the Ibex35 globally, 2,435 of which were issued in Spain. Other markets that have made frequent use of the index as an underlying include Germany (1,388 products), Portugal (742 products) and The Netherlands (183 products) amongst others.
The Mexican Bolsa continues to dominate the Mexican market as the most used equity index, with 29 products recorded so far this year. The only other equity indices that have been used as underlyings are MSCI Brazil (5), MSCI emerging Markets (4), S&P500 (3), JPMorgan ETF Efficiente 5 (1), Gold Trust (1) and Ibex35 (1).