Royal Bank of Scotland’s global banking and markets business has launched its first two structured bonds for Japanese retail investors.
The three-year bonds arranged by RBS Securities Japan will be distributed via 82 Bank’s 82 Securities, a financial services provider headquartered in Nagano, central Japan.The issues follow approval by Japanese authorities for shelf-registration status that allows RBS to act as a frequent issuer in the public bond market.
“This transaction comes as a result of extensive team work, and we are excited by the opportunities of the Japanese retail structured products market,” says Robert Begbie, Head of RBS structured investment products. “Through working with a well respected distribution partner, such as 82 Securities, we are confident the launch will act as a springboard to success in Japan for RBS’s structured products offerings.”
3 Year Auto-Callable Digital Coupon Note - Worst of, is linked to Sumitomo Metal Industries and Marubeni Corporation. In its first year it pays a fixed quarterly income worth 8% pa. In following quarters investors receive an 8% annualised coupon provided neither underlying stock has fallen by more than 15%. Otherwise investors receive a 0.25% annualised coupon.
The product matures early at par and with the relevant coupon if ten days prior to any quarterly payment dates both shares are at or above their initial levels.
If the product never knocks out capital is returned at maturity provided neither stock has fallen by more than 30%. Otherwise capital is reduced in line with the worst performing share.
A second bond with a similar structure linked to Daiichi Sankyo Company and Mitsubishi Materials Corporation targets 9% pa yield.
The launch also represents the first time that RBS has arranged an equity-inked bond issue for a Japanese regional securities company.
A pre-solicitation period for the issues runs from 8 to 15 January and the public offering period has been set from 18 to 24 January 2008.
