Goldman prices $52.6 million notes linked to China Select, reverse exchangeables linked to Time Warner

By Sheri Kasprzak

New York, Dec. 22 - The Goldman Sachs Group Inc. led light structured products activity Friday ahead of the Christmas holiday.

The lead offering was $52.603 million in 0% notes linked to the Goldman Sachs China Select index.

The deal, according to one equity structurer contacted Friday, may be representative of a zeal for all things Asian in emerging markets.

"That's a good size so it would say to me that there is a great deal of popularity with Asian stocks," he said.

"We're seeing a lot out of China these days in particular. [Emerging markets], I'll wager, will probably continue to be reasonably popular for investors going into at least the first half of 2007."

Terms of the notes

The index is a newly created composite index reflecting a weighted basket of 30 Chinese stocks made up of companies listed on the Hong Kong Exchange, the New York Stock Exchange and the Nasdaq stock market.

Payout at maturity will be par plus any positive or negative percentage change in the index. The final index level will be the average closing level of the index on the five trading days beginning Jan 15, 2008.

Another Asia-related offering

In other Asia-related structured products offerings, Merrill Lynch & Co., Inc. said Friday it intends to price one-year 0% principal-protected notes linked to a basket of Asian currencies, including the Chinese renminbi.

Not all of the currencies in the basket are from emerging markets countries, however. The basket also includes the Japanese yen and the Singapore dollar, as well as the Indian rupee.

Payout at maturity for the basket will be par plus any positive return, multiplied by an additional percentage of between 100% and 115%. Investors can expect to receive at least par.

Goldman's Time Warner notes

Elsewhere at Goldman, the investment bank negotiated the terms of a $33,000,167.68 offering of 20% reverse exchangeables linked to Time Warner Inc.

The payout at maturity of the two-year notes will be the product of the final stock price and the exchange rate of 0.8234 if the final price of the stock is less than the threshold price of $26.53, 121.45% of the initial price of $21.844.

The investors will receive par in cash or stock otherwise.

Eksportfinans plans reverse convertibles

Looking elsewhere in structured products Friday, Eksportfinans ASA plans to price 11.25% knock-in reverse convertibles linked to Apple Computer, Inc. through IXIS Securities North America Inc.

The one-year notes carry a knock-in price of 75% of the initial price, or $63.57.

Apple has been a popular reference stock for reverse convertibles in the past few months.

Earlier this month, ABN Amro NV priced $1 million in one-year 12% knock-in reverse convertibles linked to the stock and also announced that it plans to price one-year 13% notes also linked to Apple on Dec. 26. Both notes have an 80% knock-in level.

Also, Societe Generale announced its plans earlier this month to price 10.5% ReConvs linked to Apple on Dec. 26. Those one-year notes have a 70% knock-in trigger.

Back in October, Bear Stearns Cos. Inc. priced $1.35 million in 14% reverse convertibles linked to Apple. Those notes also had an 80% knock-in level.

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