This week's product wrap analysis covers products with strike dates between August 26 and September 1, 2017, and includes structures linked to managed funds, credit and currencies.
EUROPE
Fifty-two structured products, excluding leverage and flow, struck in Europe this week, distributed across 12 jurisdictions and including two private placements.
In Belgium, Deutsche Bank launched the second tranche of its Fund Opportunity Coupon 2027, a 10-year medium-term note offering a potential yearly coupon equal to the annual performance of an equally-weighted basket comprising four managed funds: M&G Dynamic Allocation Fund Euro Class A, DWS Concept Kaldemorgen LC, Deutsche Multi Opportunities NC and Carmignac Patrimoine. The product, which is listed on the Luxembourg Stock Exchange, collected sales of €3.8m ($4.5m) during the subscription period, with a commission fee of up to 4.5% payable by the issuer to the distributors (comprising a 2% placement and 2.5% distribution fee).
In Finland, UB Omaisuudenhoito marketed Yrityslainakori Amerikka II/2017 to retail investors. The credit-linked note, which has a term of just under five years and is issued by SEB, is linked to the Markit CDX North America High Yield S28 Index. An annual income of 7.5% is on offer, providing no more than 15 credit events happen to companies in the underlying index. Commission is set at a maximum of 2% of the subscribed amount.
Meanwhile, in the UK, BNP Paribas collaborated with Meteor Asset Management for the launch of the FTSE 100 Defensive Supertracker Plan. The Luxembourg-listed note is available for investment as a pension scheme and 2017/18 tax year stocks and shares Isas and is issued by BNP Paribas Issuance investment. The product offers a 200% participation in the positive performance of the FTSE 100, capped at 150%, providing the final level of the index is above 75% of its close on August 31, 2017 (7.430,62).
NORTH AMERICA
Eighty-three structured products struck in North America during the week, including 78 products in the US and five in Canada.
UBS issued the Trigger Phoenix Autocallable Optimisation Securities in the US. The registered note, which collected sales of $3m, is linked to the VanEck Vectors Oil Services ETF. The two-year product offers a contingent coupon of 4.7% per semester providing the level of the underlying ETF does not fall by 30% or more on the bi-annual observation date. The estimated initial value of the product is 96.8% and a commission fee of 1.75% applies.
Also in the US, Citi introduced new market-linked notes in the form of a growth and income product linked to an equally-weighted basket comprising the Eurostoxx 50, S&P 500 and iShares iBoxx $ High Yield Corporate Bond ETF. The capital protected notes pay a fixed semi-annual coupon of 0.5% per annum throughout the 5.5-year investment period, offering a return equal to [100-110]% of the positive performance of the basket at maturity. Estimated value of the product is 86% and an underwriting fee of 3% applies.
The five Canadian products all came from National Bank of Canada and included the NBC Autocallable Note which is linked to the Eurostoxx Banks Index. The product is distributed via National Bank Financial and CIBC World Markets, with the latter an independent agent.
LATIN AMERICA
There were 26 structured products with strike dates between August 26 and September 1, in Latin America, all of which were marketed in Mexico. The products were all linked to foreign exchange rates and were distributed by Monex (17 products), Banamex (six) and BBVA Bancomer (three).
Eighteen products used the dual currency payoff structure including Monex' Dual Currency Note USD/MXN. The product has a duration of one week and pays a coupon of 3% pa, paid in Mexican peso, if the US dollar appreciates against the Mexican currency. Otherwise, the product offers a coupon, paid in US dollars, at a 17.91 exchange rate. The product sold MXN35.23m ($1.9m).
ASIA PACIFIC
Eighty products were issued in the Apac region over the week. Taiwan, with 33 products, was the most active market, followed by South Korea (23), Japan (22) and China (two).
Agricultural Bank of China issued Jin Yao Shi S317, a two-month wealth management scheme linked to the CSI 300 Index. The capital protected product offers a return of 4.6% pa if, on the final observation date, the level of the index is within a range of 95%-105% of its initial level. Otherwise, the product offers a coupon of 3.5% pa at maturity.
In South Korea, HDC Asset Management, part of Hyundai Development, launched the HDC ELF HEN-18, which is distributed, among others, by KB Investment & Securities, Korea Investment & Securities, Mirae Asset Daewoo Securities and Shinhan Investment. The equity-linked fund, which has a term of three years, is linked to a basket comprising the Eurostoxx 50, Hang Seng Index and Nikkei 225.
Okasan Niigata Securities launched the EB NGK Spark Plug M20180301 in Japan, a six-month reverse convertible product issued by Svensk Exportkredit with BNP Paribas the derivatives manufacturer. The unlisted registered note is linked to the share of NGK Spark Plug and collected sales of JPY300m ($2.7m) during its subscription period.
MIDDLE EAST AND AFRICA
The 14 structured products that struck in the Middle East and Africa over the past week all came from Standard Bank, were targeted at the South African market and were linked to the local FTSE/JSE Africa Top 40 Index.