Nomura America Finance to enter U.S. structured products market

By Emma Trincal

New York, Oct. 18 - Nomura America Finance, LLC is building up a structured products franchise in the United States, according to a product prospectus supplement filed with the Securities and Exchange Commission and two Nomura Holdings Inc. executives.

Nomura America Finance said that it plans to offer range accrual notes from time to time, according to a 424B3 filing with the SEC on Oct. 4.

Some of the accrual conditions may involve the spread between two Constant Maturity Swap rates; the level of Libor compared to the strike; and the level of the Consumer Price Index within a specified range.

Nomura Holdings will guarantee the notes.

The Japanese brokerage is working at building a functioning shelf of diversified products in order to continue to raise capital in the United States, a market participant said.

Two executives at Nomura Holdings confirmed the plans in an email.

"As we continue to expand our presence in the U.S. markets, we are pleased to announce our SEC registered shelf for structured investments," Jeff Michaels, joint head of fixed income, Americas, and Ciaran O'Kelly, head of equities, Americas, said in the email.

"This shelf enables delivery of our strong fixed-income and equity capabilities to a broader set of clients and investors in the U.S. market."

Lehman's legacy

Nomura's first foray into the U.S. structured products market fits an overall strategy of global expansion seen over the past two years in the context of the Lehman Brothers collapse, the market participant said.

In September 2008, Nomura acquired the European and Middle Eastern equities and investment banking operations of Lehman Brothers.

This deal shortly followed Nomura's purchase of Lehman Brothers' entire franchise in the Asia Pacific region including Japan and Australia, which also occurred in September 2008.

Nomura started to raise capital in the U.S. markets earlier this year. Its first dollar-denominated offering in the U.S. market was a corporate issue of $3 billion.

Delivering structured products to their clients is seen as a key step in the firm's strategy of raising capital in the countries in which it operates, according to the market participant.

More to come

Nomura intends to offer a broad platform.

"Nomura filed product prospectus supplements, and there will be more coming, to provide foundation for issuance in rates, equities and commodities," the market participant said.

"Nomura is a huge broker-dealer in Japan and obviously does not have a retail distribution network in the U.S., but they are working with distributors.

"The first step is to build a functioning shelf."

Nomura's clients in the United States are mostly institutional investors, including money managers, pension funds, insurance companies, banks, private banks and regional broker-dealers.

Based in Tokyo and with regional headquarters in Hong Kong, London and New York, Nomura has a staff of over 27,000 worldwide and has an international network in over 30 countries.

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