Hartford plans two principal-protected equity-linked offerings; Svensk prices $25.34 million notes

By Sheri Kasprzak

New York, Jan. 22 - Hartford Life Insurance Co. grabbed structured products headlines as the insurance company announced plans to price two principal-protected notes, both linked to the S&P 500 index.

"It's uncommon, sure, but I don't think we're in danger of having this great wave of competition from insurance companies," one market source said, laughing, when asked about the entry of Hartford into the structured products business. "I'm willing to bet it's a situation where they'll do a limited number of things anyway."

Another market source agreed that Hartford's leap into structured products poses little threat.

"I'm not sure if I'd say it's a threat," he said. "I don't really think they'll be opening their own [structured products] desk."

Tim Benedict, a spokesman for Hartford, did not return several calls for comment on the two offerings by press time Monday evening.

Deal terms

In one offering, which is set to price Feb. 6, the zero-coupon, six-year notes pay par plus any gain on the index multiplied by the participation rate - expected to be between 100% and 106%. The investors can expect to receive at least par at maturity.

The second deal - a 2% principal-protected notes offering - is scheduled to price Feb. 1.

Payout at maturity will, again, be par plus any index gain multiplied by a participation rate anticipated to be between 56% and 60%.

Both deals have a large group of agents attached. The lead will be Bear, Stearns & Co. Inc. with the syndicate including A.G. Edwards & Sons Inc.; Banc of America Securities LLC; Charles Schwab & Co Inc.; Citigroup Fidelity Capital Markets Services; Merrill Lynch & Co.; Morgan Stanley; Piper Jaffray & Co.; Raymond James; RBC Dain Rauscher Inc.; Scott & Stringfellow Inc.; UBS Investment Bank; and Wachovia Securities.

Hartford previously priced equity-linked deals on Dec. 19 and Jan. 18, both linked to the S&P 500.

Svensk prices notes

In other news, AB Svensk Exportkredit wrapped the terms of a $25.337 million offering of notes linked to equal weights of the iShares MSCI Emerging Markets Index Fund and the Goldman Sachs Commodity Excess Return Enhanced Strategy. The notes were priced through Goldman, Sachs & Co.

Payout at maturity will be 97% of par plus a supplemental redemption amount.

If the return on the basket is positive, the redemption amount will be par multiplied by the participation rate of 75%. If the return is zero or less, there will be no supplemental redemption payment.

Rabo's two offerings

Elsewhere in structured products, Rabo Financial Products BV is in the process of negotiating two reverse convertible deals with coupons over 20%.

The investment bank plans to sell 25% reverse convertibles linked to Netflix Inc. and 20.15 % reverse convertibles linked to SanDisk Corp.

The three-month Netflix notes carry an 80% knock-in price and are set to price Feb. 2.

The SanDisk notes are also due in three months and also have an 80% knock-in price. Those notes are also set to price on Feb. 2.

SanDisk in particular has been popular as a reference stock for reverse convertibles for quite some time now.

Earlier this month, Barclays Bank plc priced $2.5 million in 18.75% notes linked to SanDisk and ABN Amro Bank NV is planning to price 16% knock-in reverse convertibles linked to the stock later in January.

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