Trade of the month: Multi-issuer structured products

The pros and cons of obtaining diversification through multiple counterparties

Dividing the credit risk among several issuers

The concept of a single bank creating and managing a structured product that is linked to a pool of different issuers is a fairly straightforward one. In the UK, Investec and Societe Generale are the most frequent proponents of the technique.

Structured products are usually released by a single issuing bank rather than a plan manager, however, with investors taking the credit risk on that entity. But there is a drawback to this approach - if an investor only buys products from one issuer, any ad

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