Morgan Stanley has added to its popular gilt-backed range of structured plans with the Morgan Stanley Gilt Backed Growth Plan 16, the fourth tranche in the series to be issued since January this year.
The plan, a six-year 50% soft-protected knock out linked to the FTSE100 index, will mature early paying out 6.8% if the index closes at or above its opening level on a given observation date.
“The Gilt Backed Growth Plan continues to be one of our most popular products in the UK retail market,” said Nev Godley, vice-president at Morgan Stanley. “It demonstrates that not all investors are only interested in products with the highest headline rates. There are many who prioritise minimising their counterparty exposure instead.”
The fact the plan is collateralised with UK government bonds (rated AAA by Standard & Poor’s and Aa1 by Moody’s) distinguishes it from the majority of offerings in the UK retail space and ensures its popularity among more risk averse investors.
Structured product providers are increasingly offering plans with greater collateralisation, reflecting investor appetite for reduced counterparty risk. Gilt-backed products, however, are still a minority. Providers such as Investec, Skandia and Société Générale tend to favour linking products to pools of four or five counterparties to reduce risk.
Related Stories
MS adds to gilt-backed range in UK
Skandia to roll out Investec fund until October
Investec expands Global 4 collateral option in UK market