Marex is eyeing the US structured note market, UBS rebranded three Credit Suisse ETNs, while a Dutch asset manager returned to the retail market after a 15-year absence.

UBS has rebranded three covered call ETNs that were issued under Credit Suisse, adding significant assets under management to UBS' existing ETRACS ETN platform, as the Swiss bank is seeking to expand its presence and proactively push its offering in the US ETN space.

With the US being the largest market for wealth management, the migrated products provide us with a prime opportunity to expand our presence in this space - Erica Yeu, UBS

These ETNs distribute variable monthly income generated from hypothetical sales of call options on gold, silver and crude oil ETFs respectively.

“With the US being the largest market for wealth management, the migrated products provide us with a prime opportunity to expand our presence in this space,” Erica Yeu, managing director, global head of wealth management solutions structuring and Americas head of solutions structuring at UBS, told SRP.

The hot US market is attracting more players – and the next one may be Marex Group. The UK financial service firm is targeting mid-next year to complete its shelf registration with the US Securities and Exchange Commission (SEC) as it looks to begin issuing structured notes onshore, according to sources familiar with the matter.

If approved, Marex will join the current 17 issuers active in the US market which includes recent re-entrant Nomura, and become the only non-bank issuer in the SEC-registered structured notes market worth over US$100 billion.

On the indices side, BNP Paribas and American National partnered to launch a rules-based Patriot Technology Index (PATRIOT), exclusively available via a fixed index annuity (FIA) offered by US insurer Galveston. With a seven percent volatility control overlay, the multi-asset play is the first custom index for the Texas-based insurer and aims to provide a balance between growth potential and asset protection by offering exposure to companies that are aligned with the US Department of Defense’s critical technologies list.

In Columbia, BNP Paribas also saw the issuance amount soar: From January to May, around COP1.8 trillion (US$464.3m) nominal of principal-protected structured notes have been issued to local pension funds through its euro medium term note programme (EMTN), Marie-Laure Dang, managing director, head of pension & insurance sales for Latin America, said.

Zooming into the European market, Wijs & Van Oostveen made a comeback in the Dutch market following its launch of three certificates, each with a tenor of a maximum of three years: W&O Index Garantie Certificaat, W&O 10% Trigger Certificaat, and W&O 20% Trigger Certificaat. These are the first structured products Wijs & Van Oostveen has issued since 2009 after a 15-year absence in the market.

“Interest rates have been very low over the past 10 to 15 years and for a long period they were even negative [...] during this time it was difficult to create interesting structured products because the underlying bonds were relatively expensive,” Robert Schuckink Kool, chief investment officer at Wijs & Van Oostveen told SRP. “However, since 2023, interest rates have been at a substantially higher level, which has changed the situation. At the moment, structures can be created with good protection on the one hand and attractive upside potential on the other.”

Meanwhile, in Switzerland, Nvidia and other blue chips driving the electronics industry were at the forefront of underlying themes in June, according to SRP Market Review. In the first six months of 2024, the Swiss primary market grew two-fold year-on-year (YoY). Some 146,517 products were launched between January and June 2024, up 31% compared to the same period last year.

However, in the UK, the market saw issuance reach a 32-month low last month as the number of asset classes was limited to equity indices and interest rates.

In Asia, market expectations of a rate cut have prompted Krungthai Bank to look at Thai investors’ new interest: mega long-tenor interest rate-linked products.

Starting in April, the Thai banking giant issued five 13-year-long structured notes with optionality linked to the Thai Overnight Repurchase Rate (THOR), which serves as a benchmark for short-term borrowing and lending in the Thai money market and hovers around 2.5%.

The unusual 13-year long tenor – the longest seen in Thailand to date – was introduced to respond to growing demand from investors looking to capture yield at the current interest rate level for “as long as possible,” according to Tortrakun Satayapra, head of structuring and products development at Krungthai Bank.

Following Société Générale was recognised as “Best House, Asia Pacific” for the sixth time at SRP Asia Pacific Awards 2024, the French bank’s head of global markets sales, Asia Pacific Jung-Jin Yoon (JJ Yoon) told SRP that in the first half of the year, the bank saw its structured products traded notional in Asia ex-Japan soar around 50% year-on-year.

In South Korea, domestic blue-chip stocks were the preferred underlying assets deployed via principal-protected equity-linked bonds (ELB) in June, according to data compiled in SRP’s latest Market Review. Among, ELB products tracking shares of Samsung Electronics saw a KRW1.45 trillion sales volume last month. ‘The increase in ELB issuance this year is interpreted as the balloon effect of the decline in equity-linked securities (ELS) issuance and the relatively high interest rate level,’ Samsung Securities’ analysts wrote in a quarterly note.

Image: Worawut/Adobe Stock.

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