JPMorgan to price notes linked to silver; Goldman prices $40.81 million index-linked notes for Svensk

By Sheri Kasprzak

New York, Nov. 8 - JPMorgan Chase & Co. led structured products news Wednesday with word that it plans to price 0% buffered return enhanced senior unsecured notes linked to silver.

"I honestly think this is a little past its prime," said one market source familiar with commodities when asked about the structure of the deal.

"Silver would have been great a month ago, but prices really are stabilizing in that I don't think silver is going to be making great gains or losses in the near future. That prices are stable is not a bad thing though, and if you've got to invest in silver, you could do worse."

Another market source familiar with commodities said he feels there's still some value in linking the notes to a single commodity.

"You're only looking at the performance of one [commodity]," he said. "When you've got a basket of things, you're at the mercy of what the basket does, not just what the one commodity will do."

Terms of the notes

Under the terms of the JPMorgan notes, payout will be par plus three times the appreciation of the fixing level of silver up to a maximum return of 48%. If the index declines, the investors will lose 1% for each 1% the index declines beyond the starting level.

The notes, due Dec. 27, 2007, are set to close Nov. 21.

Citigroup's gold-linked notes

Earlier this month, Citigroup Funding Inc. announced its plans to price 0% commodity-linked notes based on the price of gold.

Those notes, due 2007, pay 97% of par plus the gain in the price of gold capped at between 19% and 21%. The exact cap will be determined at pricing.

Svensk's index-linked notes

In other structured products news, Goldman Sachs Group Inc. priced $40.812 million in 0% outperformance notes linked to the Dax and S&P/TSX 60 indexes for AB Svensk Exportkredit.

The notes are similar to notes Goldman priced for Svensk in October.

Under the most recent notes, the investors will receive par plus the percentage by which the long index outperformed the short index. If the return on the short index exceeds that of the long index, payout will be par minus the percentage by which the long index underperformed the short index.

The latest notes are due Nov. 21, 2008.

Svensk's October notes

On Oct. 20, Goldman priced $13.513 million in 0% outperformance notes also linked to the Dax and S&P/TSX 60 indexes for Svensk. Those notes are due Oct. 24, 2008.

That was an add-on to a $76.175 million deal priced on Oct. 10.

The payout terms are similar to the payout terms of the $40.812 million notes just priced.

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