J.P. Morgan distributes notes for competing investment banks; HSBC plans 25.8% notes linked to Rambus

By Sheri Kasprzak

New York, Dec. 11 - J.P. Morgan Securities Inc. has popped up as a distributor on several offerings for competing investment banks lately.

J.P. Morgan refused to comment on the offerings by press time Monday, but one market source at another investment bank said that given the fact that so-called "open architecture" is becoming more widely accepted in the U.S. structured products market, it is not surprising that JPMorgan is distributing other investment banks' offerings.

"It had been something you'd see more of in Europe but it's gaining a degree of popularity here," he said.

"I can't answer for them, obviously, but that seems to make the most sense to me. More and more, I think you'll see investment banks doing [offerings] for their competitors, especially if the investors demand it."

Barclays prices DJ Euro Stoxx notes

Moving to specific offerings J.P. Morgan is distributing, Barclays Bank plc sold $6.6 million in 0% buffered return enhanced notes linked to the Dow Jones Euro Stoxx 50 index.

The two-year notes pay par plus twice any positive return on the index up to 16.2%. The return is calculated as the average level on Jan. 7, Jan. 8, Jan. 9, Jan. 10 and Jan. 11 in 2008. If the ending index level declines by no more than 10%, investors will receive par at maturity. Investors will lose 1.1111% for every 1% the index declines beyond 10%.

This is not the first time J.P. Morgan has distributed offerings for other investment banks.

Late last week, J.P. Morgan was the placement agent for 0% notes linked to the Russell 2000 index planned by Morgan Stanley, as well as 0% notes linked to the Nikkei 225 and 0% annual review notes linked the S&P 500 index.

HSBC's 25.8% Rambus notes

Elsewhere in structured products, HSBC USA, Inc. announced its plans to price a reverse convertible with a huge coupon linked to Rambus Inc.

The tech company has been a popular name linked recently to many reverse convertible offerings.

The 25.8% reverse convertibles HSBC plans to price have a 65% barrier level and are set to price Dec. 21.

Several other investment banks have linked offerings with similar coupons to Rambus' stock. On Dec. 4, Rabo Financial Products BV announced its plans to price 22% reverse convertibles linked to the stock and back in September, HSBC priced another offering of $1.656 million of 30% notes linked to Rambus.

In November, ABN Amro NV priced $1.875 million in 19.5% reverse convertibles linked to the name and HSBC plans another offering with a 21% coupon linked to Rambus coming up.

Throughout November, the stock traded between $16.14 and $23.10, but so far this month, the stock seems to have settled itself. In December, the stock has traded between $20.92 and $21.95, losing 38 cents on Monday to close at $20.92 (Nasdaq: RMBS).

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