The focus will be on ESG initiatives this week, as many players in the structured product space ramp up their sustainability work.
BNP Paribas USA has launched a philanthropic campaign to fund an independent non-profit organisation with donations from structured notes purchases. The French bank’s new structured notes campaign will help The Forgotten International, an independent non-profit organisation developing programmes to alleviate poverty. BNP Paribas will donate to The Forgotten International a portion of the bank’s proceeds from structured notes sales.
We wanted to offer investors the option to invest in an ESG-related theme via structured products - Jacopo Fiaschini, Vontobel
In the EU, the French bank has collaborated with BCP Asset Management to launch the Enhanced Equity Bond in Ireland. The sterling denominated bond is 90% capital-protected and offers 200% participation in the upside performance of the Solactive Sustainable Development Goals World RC 8 EUR Index. The return is capped at 60%. A performance fee of one percent will be paid to BCP if the gross return of the bond is 18% or above. The product has a maturity of five years and daily liquidity is available via the Luxembourg Stock Exchange. The minimum investment is £20,000.
Morningstar Indexes has rolled out the Morningstar EU Climate Indexes to help investors progress toward meeting EU Climate Transition Benchmarks (CTB) and Paris-Aligned Benchmarks (PAB) requirements. This new climate index series from Morningstar allows investors to target companies within a broad market index that are on track for decarbonisation in line with Paris accord targets, while minimising tracking error against the parent index. The series combines Morningstar core benchmarks with carbon emissions data and Carbon Risk Ratings from Sustainalytics, a Morningstar company and leading global provider of ESG research, ratings and data.
Vontobel has launched eight new Memory Cash Collect (Express) Certificates with the ‘Act ESG’ logo in Italy. The certificates are linked to thematic baskets comprised of stocks that are correlated – ranging from the gaming sector to the construction sector.
“We wanted to offer investors the option to invest in an ESG-related theme via structured products,” said Jacopo Fiaschini, head of flow products distribution Italy, Vontobel Digital Investing.
The Swiss bank created sector baskets for the certificates that are entirely composed of stocks of companies considered to be sustainable by its ESG Competence Center in Switzerland.
In people news, Miguel Barrio has joined Goldman Sachs as a managing director in corporate treasury asset liability management (ALM) strategy (strats). In this role, he will drive several key initiatives in ALM, including funds transfer pricing (FTP) engineering and deposit modelling. He will report to Mariano Zimmler, partner, head of ALM strategy at Goldman Sachs.
Two law firms have also added key staff: Ashurst has appointed Inna Zaychik as counsel in its global markets practice, based in New York. Her practice will focus on prime brokerage, OTC and listed derivatives, futures, structured products, capital market and commodities. Prior to joining Ashurst, she was a director at Bank of America Merrill Lynch. Davis Polk has announced that Caitlin Wood has rejoined the firm as counsel in the derivatives & structured products practice in New York. In her new role, Wood will advise financial institutions as well as corporations, sponsors, hedge funds and individuals on OTC products, equity-based financing, equity-linked securities and structured.
German reinsurer Munich Re is accelerating its growth plan as it targets investors seeking to switch from bank provided products. As insurance companies increase the use of structured products to offer exposure to capital markets in a non-linear manner with guarantees to investors looking into retirement, Christian Probst, head of capital market solutions structuring Europe & North America, told SRP that the firm typically engages in longer-term, larger projects that tend to be more strategic for its clients, as opposed to the players in the retail distribution business which do numerous smaller ticket transactions.
“This year we closed a double-digit number of transactions in Europe, typically with economics that benefit from personalised guarantees and/or investment portfolios and often using the insurance company’s general account as a temporary or permanent support for guarantees,” says Probst.
UBS has fallen out of the top 10 global issuers ranking despite making up some ground compared to the previous quarter. It has posted a profit before tax (PBT) of US$2.8 billion (up 11% YoY), including net credit loss releases of US$14m, in the third quarter of 2021.
The Swiss bank has seen operating income increase two percent YoY, while operating expenses decreased by one percent. Net profit attributable to shareholders was US$2.2 billion (up nine percent YoY). During the first nine months of 2021, UBS global wealth management (GWM) saw US$80 billion of net new fee-generating assets with inflows in all regions, and there was US$23 billion in net new lending across GWM and personal and commercial (P&C) banking, while strong client activity drove YoY increases of eight percent in transaction-based income in GWM and 44% in global banking income.
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