Société Générale offers credit exposure

Société Générale has launched a new product offering exposure to the credit default swaps of speculative-grade companies. The investment is linked to the number of defaults in the iTraxx five-year Crossover Index.

The index comprises 50 European companies which are forecasted by Moody’s to remain below long-term average and market implied default rates. Investors could receive an internal return rate (IRR) of up to 14.25% provided that none of the index constituents suffers a credit event during the product’s five-year life, which could be either bankruptcy, failure to pay or restructuring.

The Crossover notes are purchased at 54-55% of their value, to be redeemed at 100% at maturity. For each index