US Wrap: Reverse convertibles dominant product in Monday’s market

Reverse convertible structures represented half of new issuance in the US yesterday, just outnumbering accelerated growth products. ABN Amro issued four of the notes, and Royal Bank of Canada (RBC) contributed a single note to the offering. Both providers unveiled a product linked to General Electric stock, each with a maturity of three months. ABN Amro's note pays an annualised monthly coupon of 16.5%, with a 50% stock barrier whereas RBC's note pays a higher 23% coupon but with a 60% barrier. Unusually, the higher coupon is coming from the provider with the higher credit rating - typically the reverse is true, although this is slightly mitigated by the different stock barriers on each.

Wachovia put its name to two products issued by external credit provider Eksporfinans. Although one was the typical S&P 500 accelerated growth play, the other linked to the Dow Jones Industrial Average, another break with tradition and only the second structure this year linked to the index.

Issuer

Product type

Underlying

Pricing date

Maturity date

Royal Bank of Canada

Reverse Convertible

General Electric

Apr 17 2009

Jul 22 2009

UBS AG

Accelerated Growth

S&P 500

Apr 03 2009

Oct 08 2010

Eksportfinans ASA

Accelera