Tenors get extended as structurers face poor market conditions

Tenors in the latest issuance have been stretched, possibly due to tough structuring conditions resulting from low rates and volatility.

HSBC has issued a leveraged product with a 10-year tenor, which is almost unheard of for retail equity-linked products. The product tracks the S&P 500 and has a participation rate of 180-200%. If the downside barrier of 50% is breached capital will be lost at the rate of 1:1. The product has a relatively low riskmap score of 6.3 and an overall score of 3.8.

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