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Structured products action led by two deals linked to MDAX index; JPMorgan, UBS plan deals
By Sheri Kasprzak
New York, April 8 – Two offerings linked to the MDAX index of German companies topped structured products action Wednesday.
JPMorgan Chase & Co. and UBS, AG, London Branch each announced plans to price notes linked to the index, Securities and Exchange Commission filings indicate.
JPMorgan notes ahead
Looking to the JPMorgan offering, the bookrunner plans to price zero-coupon notes linked to the index. Those notes are due April 27, 2016.
The notes pay $1,000 multiplied by one plus the index return multiplied by 98.35% at maturity. Because of the 98.35% adjustment factor, investors will lose principal at maturity if the index return is less than 1.67768%.
The final index will be the average of the closing index levels on the five trading days ending April 22, 2016.
Pricing is expected on Friday.
UBS notes to price
The UBS notes are European-style, cash-settled call warrants linked to the MDAX Total Return index. The warrants are due April 13, 2018 and have a notional amount of $1,000 per warrant.
The initial investment will be $169.80 per warrant, or 16.89% of the notional amount, with a minimum purchase requirement of 59 warrants.
The warrants will be automatically exercised on the expiration date if the index’s final level is greater than the initial index level. The cash settlement amount will be the greater of (a) the notional amount multiplied by the index return and (b) zero.
The index return must be greater than 16.98% for investors to receive a positive return on their initial investments.
If the index’s final level is equal to or less than the initial index level, the warrants will expire worthless, and investors will lose their entire initial investments in the warrants.
Pricing for this deal is also expected on Friday.
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