Merrill Lynch launches temperature-linked certificate
Merrill Lynch has launched the first temperature-linked certificate for the Italian retail market.
The certificate starts to pay out at an average annual temperature of 16.38°C, with the coupon rising linearly to a cap of 16% at an average of 17.38°C.
Jens Boening, Merrill Lynch's head of Europe, Middle East and Africa weather derivatives structuring, said: "It enables agricultural, commercial and retail clients in Italy, who have recently suffered from rising temperatures, to mitigate the risk of above-average heat."
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