Axa Bank has become the latest Belgian provider to launch a structured note denominated in Norwegian krone. The eight-year, fully capital protected Optinote Scandinavia NOK participates 100% in the rise of an equally weighted basket comprising the OBXP Index and the OMX Stockholm 30 Index, subject to 30 months backend averaging. The EMTN requires a minimum investment of NOK10,000 (€1,083) and is issued via the bank's Dutch domiciled Axa Belgium Finance vehicle while Axa Bank Europe acts as the guarantor.

The product is Axa Bank's first equity linked structure denominated in the Norwegian currency. "The Norwegian economy is struggling at the moment, caused by, among other, the sharp fall in the oil price," said Caroline Boulenger (pictured), head of product management daily banking, savings & investments at Axa Bank Europe. "However, the country is working hard to restructure its economy and Axa sees increasing potential for the Norwegian krone, especially if in the long term the oil prices start to rise sustainably," she said. "This sustainable growth combined with the economic restructuring should have an upward effect on the Norwegian krone relative to the euro."

Krone aside, Axa has no plans at the moment to launch structured products in currencies other than euro or US dollar, according to Boulenger. "Currencies such as the Australian dollar or New Zealand dollar are too volatile at the moment."

Products linked to a basket of equity indices are few and far between in Belgium, and the OBXP Index and OMX Stockholm 30 Index, especially, are rarely used as underlying for structured products. "It was important for us that there was a link between the currency of the issue and the underlying assets," said Boulenger.

"The currency was NOK so that's why we went in search of an index or fund comprising mainly Norwegian companies. The result was the OBXP Index which includes the 25 most liquid companies on the Oslo stock exchange." Most of the companies listed on the index, such as Seadrill Ltd, have international activities thereby reducing their dependence on the Norwegian economy, according to Boulenger. "To further spread the risk we decided to add a second index, a Swedish index."

Ten structured products linked to the Norwegian krone, including offerings from KBC, Deutsche Bank and Crelan, have been distributed to the Belgian retail investor this year to date, making it the third most popular currency behind euro (139) and US dollar (34).

Axa Bank has distributed 147 structured products in Belgium, dating back to February 1995, according to SRP's database. The structures, of which 46 are still live, are wrapped as securities (19), funds (78) and life-insurance products (50).

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