US Wrap: Accelerated growth dominates again as exposure stays narrow

Accelerated growth products continued to be the dominant theme in the US yesterday, although four days of consecutively exclusive issuance of the structure were broken as one principal protected was launched. Exposure was resolutely narrow, with all six products linking to the S&P 500. Wachovia, opting for the external credit of Eksportfinans, offered 400% participation in the index over 18 months, with no downside buffer. Royal Bank of Canada, making only its second appearance this year, offered a longer more conservative play on the S&P 500: a six year principal protected note, which appeared alongside a riskier four year note with only 20% downside protection.

One product, issued by Morgan Stanley, appeared to broaden exposure slightly by adding two extra assets to the underlying basket: the Nasdaq 100 index, and the iShares MSCI index fund, which incorporates international equity. However, the S&P 500 was still weighted at 75% in overall exposure, and only 10% allocated to the international index.

Issuer

Product type

Underlying(s)

Pricing date

Maturity date

Royal Bank of Canada

Principal Protected

S&P 500

Mar 26 2009

Mar 31 2015

EKSPORTFINANS ASA

Accelerated