Goldman prices $36.52 million leveraged index-linked notes, $18.41 million in notes linked to Topix index

By Sheri Kasprzak

New York, Feb. 20 - The Goldman Sachs Group Inc. negotiated the terms of two sizable structured products offerings Tuesday, leading the way with a $36.523 million issue of 0% leveraged index-linked notes. The investment bank also priced $18.417 million in 0% enhanced-participation notes linked to the Topix index.

The basket of leverage index-linked notes also includes the Topix index.

When asked Tuesday about the seeming popularity of the Topix index recently, a market source said Japanese stocks are incredibly hot right now.

"Everyone wants to get in on the Japanese stocks," he said. "The Nikkei [225] is hot now for the same reason.

"Asian stocks in general are of interest to investors right now, I think. It's not only with indexes but with currencies as well."

Terms of leveraged notes

The 52-month leveraged index-linked notes include a 34% weight of the Dow Jones Euro Stoxx 50, a 30% weight of the FTSE 100, a 27% weight of the Topix and a 9% weight of the Swiss Market indexes.

Payout at maturity will be par plus 206% of the return if the final basket value is greater than the initial basket value. Investors will share in any declines.

Topix-linked notes

In other news at Goldman, the investment bank priced $18.417 million in 0% enhanced-participation notes linked to Topix.

The payout at maturity for the 46-month notes will be par plus 1.65 times the return on the index if the index value rises. Investors will receive par if the index declines by 25% or less and if the index drops by more than 25%, investors will lose 1% for every 1% decline beyond 25%.

Recently, Merrill Lynch & Co. priced $88 million in 0% Accelerated Return Notes linked to the Topix Small Cap index. Those 14-month notes pay par plus triple any gain on the index capped at $12.925 per $10.00 unit. Investors share in any declines in the index.

In January, Goldman priced $88.45 million in 0% enhanced-participation notes linked to the index.

JPMorgan Chase & Co. priced $2.91 million in 0% lesser index return enhanced notes in October 2006 linked to the Topix and Nikkei 225 indexes.

Lehman prices principal-protect note

Elsewhere in structure products, Lehman Brothers Holdings Inc. priced $1.5 million in BRIC leveraged appreciation basket notes with 100% principal protection.

The basket includes a long position in the Brazilian real, the Russian ruble, the Indian rupee and the Chinese renminbi with a short position in the U.S. dollar.

If the basket value is greater than zero on the valuation date, the investors will receive a single payment at maturity equal to par plus an additional return equal to the principal amount multiplied by the product of 450% and the appreciation of the basket value. If the basket value is less than or equal to zero, investors will receive par at maturity.

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