Investec is offering its clients a choice of Investec or Lloyds credit exposure in its latest structured products suite. The options, which use the higher-rated Lloyds TSB as deposit taker, have slightly reduced terms.

"The idea... is to offer clients who have made investments with Investec Structured Products in the past, and are therefore familiar and comfortable with the product features and risks, the chance to diversify the risk element of their portfolio by having Lloyds as the backing agent behind some of their investments," said head of intermediary sales Gary Dale.

Lloyds is leveraging Investec's distribution network, he said; "And from our point of view, we are retaining business that could potentially have gone elsewhere if the client decided they were over-exposed in one particular direction." It is still 'early days', he said, but he expects the products to sell well.

"This has nothing to do with credit rating because Investec has one of the most robust propositions in the IFA market. The IFA space is used to us and they expect products from us regularly so we are providing different choices. This is a commercial decision on a business proposition we had [in mind] for while." Dale said the firm chose Lloyds TSB because it offers the best terms.

A three-year version of the new Capital Guaranteed FTSE100 Plus Income Plan, deposited with the BBB-rated (Fitch) South African-owned bank, pays a potential 5.05% pa or up to 4.25% pa from Lloyds TSB (rated AA- by Fitch). A five-year version, deposited with Investec, pays a potential 7% pa or up to 5.75% pa from Lloyds TSB. Income is only awarded for years where the FTSE100 has not fallen since its strike.

Similarly, the bank's new Guaranteed 5 Year FTSE 100 Roll Over Plan aims to pay 6.5% pa simple (5% for the AA- deposit taker). Income is also paid in years where the FTSE100 has not fallen, and any payments missed are paid once the condition is met.

The first £50,000 of deposits with both banks are covered by the financial services compensation scheme. 

These products are available now in Recent Additions (UK).