Räntebevis, Nordea's new credit linked note (CLN) series recently launched in the Swedish market, have attracted much interest, the bank's head of structured products in Sweden, Peter Frösell (pictured), told SRP.
"This type of product has never existed before in Sweden and is aimed at meeting the needs of investors. In Sweden, investors tend to buy shares and bonds and thus this type of product will fill a gap both in terms of return and risk," said Frösell, who is convinced the new form of savings will appeal to new customers rather than reducing sales of other structured products.
Although the six products launched in March resemble corporate bonds, they are intended for retail clients. The notes do not have an offer period and are listed directly on the exchange. The new CLN series includes six products, each linked to a Nordic company stock including Carlsberg, Ericsson, Nokia, Stena, Stora Enso and Volvo. The products will pay a quarterly coupon equal to the 3-month Stibor rate plus a fixed percentage on an annual basis, if the underlying company has not been subject to a credit event.
Frösell said sales have been better than expected. The six products were listed on the exchange at the beginning of March and have attracted an overall turnover of SEK725m (€82m). Räntebevis Stena 3590, the note linked to the Stena share, has been the most popular product, attracting a turnover of SEK225m (€25m). This is far above both the Swedish market average of SEK24m (€2.7m) and Nordea Sweden's own average of SEK68m (€7.7m) for retail products this year.
So far, no other provider has followed Nordea's lead. Frösell said the bank will continue to offer new products in this series in Sweden, and that is reviewing the possibility of launching these products in other countries.