Austrian structured products provider Raiffeisen Centrobank AG (RCB) is marketing reverse convertible notes for the first time in the Polish market, following the listing of the products on the Warsaw Stock Exchange (WSE) at the end of July under tis subsidiary Raiffeisen Polbank.
RCB has issued two new notes linked to the shares of two Polish companies. It is targeting investors with a high fixed income coupon of 16.5% (10.73% pa) for the note linked to the stock of KGHM and 12.5% (8.18% pa) for the note linked to the stock of PKO BP. The maturity date for both notes is 31 December 2014.
At maturity, investors will be paid 100% of the par value of the notes plus the interest coupon if the underlying stock closes above the exercise price (i.e. the price of the underlying stock on 26 June 2013 for both notes). If the underlying stock closes at or below the exercise price, investors will receive stock of the company in a quantity calculated according to a conversion rate defined on the date of the first valuation, plus interest.
Raiffeisen Polbank also lauinched on Friday a reverse convertible linked to the the Bank Pekao share paying 12% (7.9%pa) and another one linked to the performance of the Polska Grupa Energetyczna (PGE) offering a guaranteed predetermined coupon of 15% (9.9%pa) at maturity. Both products struck yesterday.
The Polish exchange said that the addition of new financial instruments to its platform follows the strategy of the WSE in providing investors with a broad range of products "both traditional and innovative with a more complex structure, necessary to diversify risks also at the time of less performing markets."