ABN Amro plans notes linked to Nasdaq; Barclays prices Nasdaq-linked reverse convertibles

By Sheri Kasprzak

New York, Jan. 16 - After a three-day weekend, the structured products market cranked back up with a proposed reverse convertibles offering from ABN Amro NV linked to Nasdaq Stock Market Inc.

Barclays Bank plc priced a $7 million 17% reverse convertible linked to Nasdaq on Tuesday as well.

The two deals come amid Nasdaq's plans for a hostile takeover of London Stock Exchange.

One market source based in New York said he has no doubt the offerings are connected to the news.

"It seems likely to me," he said in an interview Tuesday afternoon. "The timing is too coincidental, I'd say. I don't think the sentiment around Nasdaq is very warm right now. This doesn't seem to be the most well-hatched plan and I think a lot of investors realize that."

Explaining the skeptical response, the market source said: "Their bid has already been rejected. I don't think they're getting the reception they'd been hoping for."

The market source noted that Nasdaq's stock will likely drop if the takeover attempt is unsuccessful.

Nasdaq has given shareholders until Jan. 26 to approve the £2.6 billion bid.

ABN Amro's 11.5% notes

ABN Amro's one-year notes bear interest at 11.5%. The notes are set to price Jan. 23 and carry a knock-in level of 65%.

The Barclays notes priced Tuesday bear interest at 17%. The three-month notes carry an 80% protection price.

ABN Amro priced $3.95 million in 14% knock-in reverse exchangeable notes in late December. Those one-year notes carried a 70% knock-in price.

HSBC USA Inc. also priced an offering of reverse convertibles linked to Nasdaq back in December.

The $3.303 million in 17.3% reverse convertibles have a six-month term.

Barclays' AMD-linked notes

In other reverse convertibles news at Barclays, the investment bank priced $1 million in 17.75% reverse convertibles linked to Advanced Micro Devices, Inc.

The six-month notes have a 75% protection level.

HSBC and Credit Suisse (USA), Inc. also announced plans earlier this month to price reverse convertibles linked to AMD.

The HSBC notes bear interest at 16.2% and carry a 75% protection level. Those notes will price Jan. 26.

The Credit Suisse notes bear interest at 13.65% notes have a 70% knock-in price.

Lehman plans currency-linked notes

Elsewhere in structured products news, Lehman Brothers Holdings Inc. is gearing up to price 100% principal-protected notes linked to a basket of currencies.

The basket includes positions in the Brazilian real, the Hungarian forint, the Indonesian rupiah, the Indian rupee, the Mexican peso and the Turkish lira and versus the U.S. dollar.

If the basket value increases by 12% on the valuation date, the payout at maturity will be par plus an additional return of 12% multiplied by the principal amount. The investors will receive par at maturity if the basket value is less than or equal to zero.

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