Hang Seng Bank is marketing a structured product with wedding cake payoff profile, which is the first product in China's market to feature such a payoff, according to SRP data.
恒得利/ Heng De Li CNY is a five-month growth structure using a combination of range and digital payoffs linked to the Hang Seng Index. The product will pay back the initial investment plus a coupon equal to 6% per annum, as long as the level of the underlying throughout the term is at or above 89% of its initial level - but below 111% of the initial level at maturity. If the first condition is not met and the level of the underlying throughout the term is greater than 78% of the initial level - but lower than 122% of the strike level - the product will return the initial capital and a coupon of 1% per annum. Otherwise, the product will return capital and a coupon of 0.36% per annum at maturity.
A Hang Seng Bank spokesperson told SRP that in order to meet the needs of its retail customers, the bank is focusing on simple and easy to understand structures although it will continue to look for innovation in product structuring.
SRP data shows that Hang Seng Bank has based its more recent issuance on simple knockout or digital structures.