Barclays plans more iPath offerings; Lehman hits 51.35% coupon

New York, Oct. 15 - Barclays Bank plc announced plans to add another four offerings to its successful iPath series of structured products.

The new deals, all set to price Oct. 23, will be linked to commodities indexes, specifically the Dow Jones - AIG Livestock Total Return Sub-Index, the Dow Jones - AIG Energy Total Return Sub-Index, the Dow Jones - AIG Natural Gas Total Return Sub-Index and the Dow Jones - AIG Industrial Metals Total Return Sub-Index.

Like the existing iPath notes, they will have a 30-year maturity, pay no coupon and will be exchange listed. Also like the existing notes, investors will be able to redeem them at various times and the payout - either at maturity or redemption - will be based on the index value minus a fee of 75 bps per year.

The existing notes were shifted to daily redemption at the start of October.

Announced that change, Barclays said iPath ETNs provide investors access to the returns of market benchmarks with less investor fees and easy transferability.

The first two iPath ETNs, launched in June 2006, were linked to commodity indexes, the Dow Jones-AIG Commodity Index Total Return and the S&P GSCI Total Return index. The third iPath ETN was linked to the S&P GSCI Crude Oil Total Return index.

The fourth iPath ETN was linked to the MSCI India index, which is designed to measure the market performance, including price performance and income from dividend payments, of Indian equity securities.

In May, the first iPath ETNs designed specifically to offer exposure to a single-currency exchange rate relative to the dollar were launched, in this case the euro, as well as the first iPath ETN to offer investors exposure to the CBOE S&P 500 BuyWrite index.

On Sept. 20, Barclays announced that investments in the notes had passed the $3 billion mark.

For the four upcoming offerings, Barclays Capital will be the agent.

iPath specifics

The Dow Jones - AIG Livestock Total Return Sub-Index notes will be based on contracts for lean hogs and live cattle and will trade on the NYSE Arca stock exchange under the symbol "COW."

The Dow Jones - AIG Energy Total Return Sub-Index notes will be based on crude oil, heating oil, natural gas and unleaded gasoline. They will also trade on the NYSE Arca stock exchange and will use the symbol "JJE."

The Dow Jones - AIG Natural Gas Total Return Sub-Index notes will be linked to the Henry Hub Natural Gas futures contract and will trade under the symbol "GAZ" on the NYSE Arca stock exchange.

The Dow Jones - AIG Industrial Metals Total Return Sub-Index will use contracts on aluminum, nickel and zinc on the London Metal Exchange and copper on the Comex division of the New York Mercantile Exchange. They will trade on the NYSE Arca stock exchange under the symbol "JJM."

Lehman deal offers 51.35% coupon

Elsewhere in structured products news Monday, Lehman Brothers Holdings Inc. announced the pricing of a reverse exchangeable with an unusually large 51.35% coupon.

The bank priced $500,000 of the notes, which are due Jan. 17, 2008 and linked to the common stock of Savient Pharmaceuticals Inc.

The knock-in price is 50% of the initial value,

Lehman Brothers Inc. is the agent.

Morgan Stanley sells Asian index notes

A notably large deal came from Morgan Stanley, which priced a $37.23 million issue of 0% buffered return enhanced notes due Nov. 26, 2008 linked to a basket of Asian equity indexes via agents JPMorgan Chase Bank, NA and J.P. Morgan Securities Inc.

The basket consists of the Amex Hong Kong 30 index with a 15.8% weight, the FTSE/Xinhua China 25 index with a 28.4% weight, the Kospi 200 index with a 27.55% weight, the MSCI Taiwan index with a 19.8% weight and the MSCI Singapore index with a 8.45% weight.

If the final basket level is at least the initial level, the payout at maturity will be par plus double any gain on the basket, up to a maximum payout equal to 121.7% of par.

If the basket declines by up to 10%, the payout will be par. Investors will lose 1.1111% for each 1% that the index drops beyond 10%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.