US Wrap: Barclays Bank leads the pack with riot of reverse convertibles

Barclays Bank issued 27 new reverse convertibles in the US market last Friday, continuing the resurgence of the structure. Wachovia launched five of the same, using the external credit of Eksporfinans. Morgan Stanley launched an accelerated growth note, the sole exception to the tide of reverse convertibles.

Morgan Stanley and General Electric were the underlying for notes issued by Barclays and Wachovia. Unusually, even with the additional credit security, Wachovia managed to pay a higher coupon of 17-18% annualised, on a note linked to Research in Motion, against Barclays' 15% on stock from the same company. The only mitigation is that the stock conversion barrier is 5% higher on the Wachovia product, at 70%.

The prevailing theme was energy, which made up over a third of new issuance in its various