Barclays brings $66.86 million market plus notes on Euro Stoxx 50 index; UBS plans similar deal

By Sheri Kasprzak

New York, Sept. 25 - A couple of market plus notes linked to the Euro Stoxx 50 index were seen in the market on Tuesday, including a sizeable offering from Barclays Bank plc.

Barclays priced $66,857,000 of zero-coupon market plus notes linked to the index. Those notes are due March 26, 2014, and the payout is par plus the index return if the index finishes below the barrier level, which is 80% of the initial index level. Investors are fully exposed to any losses.

Otherwise, investors receive par plus the greater of 7.45% and the index return.

Barclays is the agent for the notes and JPMorgan Chase Bank, NA and J.P. Morgan Securities LLC are the dealers.

Euro Stoxx volatile

The offering is the latest in a fairly large slate of deals linked to the index, which has higher volatility than the S&P 500 while still being a recognized index, said Suzi Hampson, analyst with Future Value Consultants, in a recent interview.

"The volatility for 1½ years is about 18.5%, whereas the Euro Stoxx 50 is 23%, slightly higher," she said.

"The contingent return they can offer is partly contingent upon the volatility of the underlying. The higher the volatility, the more likely the barrier will be breached, the higher the payout. They can offer better terms for investors than if they used the S&P [500] and it's still a recognized, big index."

UBS plans similar offer

Also on Tuesday, UBS AG, London Branch announced plans to price a similar deal. Those notes are due April 2, 2014 and pay the greater of the index return and the 8% contingent minimum return if the index finishes at or above the barrier level - 70% of the initial level.

Investors are exposed to any losses.

The notes are expected to price on Sept. 28.

UBS Investment Bank is the underwriter with JPMorgan Chase Bank, NA and J.P. Morgan Securities LLC as the placement agents.

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