Bank Igod, the sixth-biggest bank in Israel, has released a new currency-linked product after a year-long absence from the retail market.
SRP data shows that the bank has issued only one product each year since 2009, although the Israeli database lists a total of 48 products issued by Igod since 2003.
The year-long, capital-protected play follows the performance of the US dollar (USD) against the Israeli shekel (ILS) and at maturity will pay 100% participation in the strengthening of the USD over the ILS as long as it does not strengthen by more than 10% from its strike level, in which case the product offers a capital return of 101%.
Bank Igod joins a current trend in the Israeli structured products market where FX rate-linked products are driving issuance. So far in 2012 a total of 21 products linked to foreign exchange rates have been issued by Bank Leumi, First International and Bank Hapoalim. In 2011, the ILS/USD rate was the leading provider of such structures with 28 products in total.
In addition, a product issued by Bank Leumi linked to the ILS/USD rate matured in June, after six months of investment returning an estimated annual capital return of 4.54%