Unwrapping Russian structures

Since the 1998 stock market crash, Russia’s financial sector has evolved to play host to a derivatives industry sophisticated enough to support the development of retail structured products. As well as introducing offshore products to the local market, Russian banks have also started to create and offer their own structured products.

The issuance of Russia’s first onshore structured bond in June 2009 by investment bank Troika Dialog has added a new wrapper to the traditional deposit, nudging the Russian market one step further in its development. The 18-month product was sized at a modest Rbs176.6 million (US$6.2 million), linked to the benchmark RTS equity index and offered a participation rate of 45%. While the payoff incorporated a simple call structure, the Troika Index Bonds were the first capital-guaranteed structured