Goldman prices $20.84 million in notes linked to Topix for Eksportfinans

By Sheri Kasprzak

New York, June 19 - Goldman, Sachs & Co. led structured products news on Tuesday with a $20.843 million offering of enhanced participation notes linked to the Topix index for Eksportfinans ASA.

The offering comes as investors continue to show an interest in Asian stocks and indexes, according to one equity structurer.

"There is still an enormous amount of interest in Asian indexes," he said. "Topix isn't the only one that's out there. The Nikkei [225] has, for a long time, been a major index of interest."

The zero-coupon, 18-month notes pay three times the return on the index up to a cap of 139.15%.

If the index declines, investors will participate in the losses.

On Tuesday, Topix lost 7.90 to end at 1,780.49.

The index tracks domestic stocks in Japan.

Other Topix offerings

In April, Eksportfinans priced $27.561 million in enhanced participation notes linked to the index.

The zero-coupon, two-year notes pay a maximum redemption level of 142.8% of par if the final index level is greater than or equal to the 110.7% index cap.

If the index level ends less than or equal to the index cap, the investors will receive par plus 400% of the index return.

If the index return is less than the initial level, investors will suffer any losses on the index.

Barclays prices Stoxx-linked notes

In other news, Barclays Bank plc priced $22.388 million in buffered return-enhanced notes linked to the Dow Jones Euro Stoxx 50 index.

One market source noted that the Stoxx index has been appearing more and more linked solely to sizeable notes than it ever has before.

"For a deal this size, you traditionally have seen the [Stoxx] index linked as part of basket, most often with the S&P [500] and the Nikkei [225]," he said.

"Certainly, just looking at its historical levels, there's a lot of anticipation that the index will continue to climb and I think that's why you're seeing it so much."

Even so, the index toppled in early June, diving all the way down to the 4,375 level. The index has, however, made a comeback, although on Tuesday it gave up 3.00 but still ended at 4,527.22.

The zero-coupon notes pay double the appreciation of the index, capped at 16%.

The notes are protected up to a 10% decline in the index. Investors will lose 1.1111% of their investment for every 1% beyond 10% the index falls.

Similar deals

Last moth, Barclays priced a $32.975 million offering of buffered return enhanced notes linked to Stoxx.

Those notes also have a one-year term and pay double the index appreciation, capped at 15.7%.

The notes also have a 10% buffer and investors will lose 1.1111% for every 1% beyond the buffer the index falls.

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