Nordea Denmark's latest round of products includes two nearly identical products, NBF Guld 2014 and KK Guld 2014, using KommuneKredit and Nordea, respectively, as bond providers.
Chief analyst Martin Gros Pedersen told SRP the difference between the two products is the credit rating of the issuers: "KomuneKredit has a credit rating of AAA by Standard & Poor's, which in Denmark is called 'gilt-edged'. ...Nordea has a slightly lower rating of AA-, also by Standard & Poor's," he said. "The two issues are targeting different investor groups. The different ratings of the issuers provide different funding targets, with the lower rating providing higher yields, and hence the terms of the two products are also a little bit different."
NBF Guld 2014 and KK Guld 2014 are three-year growth products linked to the performance of gold. Every quarter the performance is registered. At maturity the four performances with the most negative or least positive change are replaced with a fixed -5.5% (KK) or -5.75 (Nordea). If the sum of the modified performances is negative, the product returns capital plus the sum of quarterly performances taken as an absolute value. If the modified performance is positive, the product returns capital. The products are issued at 104% (KK) and 102.5% (Nordea).
These products are available on the Danish database.