Credit Suisse plans 11% Revertibles linked to 10 stocks via FIS; Rabo negotiates principal-protected CDs

By Sheri Kasprzak

New York, Nov. 3 - Credit Suisse (USA), Inc. led structured products news at the end of the past week with word that it will price 11% reverse convertible notes through FIS Securities Ltd.

"We really focus on diversifying our industry selections instead of having heavy concentrations in a few sectors," said one market source connected to the Credit Suisse offerings.

"We will also have our equally weighted basket of all 10 names within 10 diversified sectors.

"This basket approach allows investors to pay one ticket charge and get 10 revertibles with one Cusip. This is unique in that the basket is equally weighted."

The equally weighted basket is linked to the shares of ImClone Systems, Inc.; Silver Wheaton Corp.; Under Armour, Inc.; Intuitive Surgical, Inc.; IntercontinentalExchange, Inc.; Red Hat, Inc.; U.S. Airways Group, Inc.; Foster Wheeler Ltd.; D.R. Horton, Inc.; and Cemex, SA de CV.

At maturity, the notes pay according to the performance of each stock. If any stock trades at or below the 70% knock-in price and closes below its initial price, the investors will receive a number of shares equal to $1,000 divided by the initial stock price multiplied by 0.1, the weighting of each component. Otherwise, investors will receive par.

Rabo's certificates of deposit

In other structured products news, Rabobank, NA said it plans to price principal-protected certificates of deposit linked to a basket including MSCI Singapore Free index, the Dow Jones EuroStoxx 50 index, the Nikkei 225 index and the Dow Jones Industrial Average index. Each index carries 25% weight.

The offering is the second of CDs announced this week.

The CDs mature Aug. 24, 2010 and are being distributed through LaSalle Bank, N.A.

At maturity, the investors will receive their deposit amount plus a supplemental redemption amount based upon the return on the basket.

Asked about the sudden popularity of CDs, one market source said Friday that the securities are an investor favorite even outside of structured products.

"It's popular because your average person likes CDs," he said.

"They're a safe investment because they're insured. They're probably safer than your average [structured product] investment, but that doesn't necessarily mean you're going to escape losses completely."

HSBC to price CDs as well

Also on Friday, HSBC Bank USA NA said it plans to price 100% principal-protected CDs linked to a basket of Asian indexes.

The 4.5 year point-to-point CDs are due April 26, 2011 and are linked to equal weights of the Nikkei 225, Hong Kong Hang Seng China Enterprises, Morgan Stanley Capital International Taiwan Cash and Morgan Stanley Capital International Singapore Cash indexes.

On Thursday, HSBC announced its plans to price four-year global index-linked certificates of deposit through JVB Financial Group, LLC.

Other ratchet-up CD

This is the second offering of ratchet-up CDs HSBC has offered through JVB in as many months.

The underlying indexes in this CD include the Standard & Poor's 500 index, the Nikkei 225 index and the Dow Jones EuroStoxx 50 index. The CD will mature Nov. 29, 2010 and is set to price Nov. 22.

Payment at maturity will be par plus the percentage increase of the index from the starting index value to the closing index value based upon the average of eight ratcheted fixing levels.

In October, HSBC priced six-year global equity index-linked ratchet-up semi-annual averaging CDs through JVB.

Those CDs were linked to equal weights of the Dow Jones Euro Stoxx 50, Nikkei 225, Hong Kong Hang Seng, Morgan Stanley Capital International Singapore Cash and iShares MSCI Emerging Markets Index Fund.

The CDs mature Oct. 31, 2012.

JPMorgan's reverse exchangeables

Elsewhere in structured products news, JPMorgan Chase & Co. said it plans to price reverse exchangeables later this month linked to two reference stocks that so far have not been linked to a reverse exchangeable offering in the recent past.

The investment bank intends to sell 22.5% reverse exchangeables linked to Evergreen Energy, Inc. and 20.5% reverse exchangeables linked to PMC-Sierra Inc.

The notes, set to price Nov. 21, are due May 31, 2007.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.