Bank of the West to enter structured products market with CDs issuance

By Emma Trincal and Angela McDaniels

New York, Aug. 17 - Bank of the West will begin issuing market-linked certificates of deposit, according to a bank news release.

The CDs will offer interest rates linked to the performance of equity, commodity, foreign-exchange or fixed-income markets.

The first issue will offer returns tied to the performance of a basket of stocks.

"This is our first equity-linked CD. BNP Paribas has worked with numerous banks on other CD offerings before. But this is the first out of this new CD platform," Jim Fujinaga, head of BancWest Investment Services, Bank of the West's brokerage unit, told Prospect News. BNP Paribas is Bank of the West's parent company.

A source at the bank said the CDs will settle Aug. 27, but further details were not disclosed.

This source added that Barclays and HSBC were two of the banks among others with which BNP Paribas did CD offerings prior to the launch of its own platform.

Maturities will vary with each offering, according to the press release.

The bank noted that the CDs will be insured by the Federal Deposit Insurance Corp. and that early redemptions of CDs are typically not permitted.

The CDs will be available to individuals and corporate and institutional investors through brokerage firms including BancWest Investment Services.

Bank of the West developed the CDs in coordination with its parent company.

"It's been a joint effort between BNP Paribas and Bank of the West," said Fujinaga.

The goal is to expand the platform from an internal distribution network to other investors outside the bank, he explained.

"We'll distribute to customers of Bank of the West. But we will expand. We have financial advisers. If it's suitable, it can be available to anybody who would like to have it," he added.

Fujinaga said that his firm has an ongoing relationship with Advisors Asset Management, a distributing company.

"We did a lot of work with them, and we will continue to work with them, including for this CD," he said.

Bank of the West is debuting its program with an equity product, but the intent is to offer a diversified supply of issues, Fujinaga said.

"We begin with an equity-linked CD with the potential to do different offerings [each] month. But every other asset class will be considered," he said.

"In this market, we see a growing demand for structured CDs, and we're very excited about this new platform," he noted.

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