Barclays bank has sold its first retail products in Canada, after a year of waiting for regulatory clearance. The UK bank plans to sell a variety of products on a regular basis, as well as secure additional distribution partners.
“This is our first foray into the structured investment market in Canada,” said Barclays Capital’s head of sales solutions Philippe El-Asmar. “For Barclays Capital, Canada is very similar to the US market four years ago. The [Canadian] program is still in its infancy.”
The first products to be distributed are eight reverse convertible notes, each linked to a single stock, including uranium producer Cameco, financial firms Citigroup and Merrill Lynch, gold companies Barrick Gold and Goldcorp, fertilizer company Potash Corporation of Saskatchewan, wireless company Research in Motion, and Canadian energy company Suncor Energy. Each note struck 21 August, has a four-month tenor and will pay a coupon at maturity ranging between 12% pa (for Barrick Gold) and 17.5% pa (for Potash Corp).
All reverse convertibles were offered through reverse inquires and distributed through BMO Nesbitt Burns (the full service investment affiliate of Bank of Montreal), and Scotiabank. These are the first two distributors with whom Barclays has signed an agreement.
However, El-Asmar added that he hopes to cement deals with other distributors and begin regular offerings for a variety of structured products that will likely also include Barclays’ super tracker notes and principal-protected notes as the Canadian business grows.
The reverse convertibles were the first to issue in Canada because that is what the Canadian distributors wanted and they have proven to be quite popular in the US market, El-Asmar said. He declined to discuss sales figures for the notes.
Until now, reverse convertibles have not been part of the mainstream in Canada. In February 2007, National Bank of Canada sold a trio of one-year reverse convertible notes linked to the performance of a single stock, two of which Barclays has now used for its own notes.
