An unnamed non-U.S. high-net worth investor bought USD25,000,000 of a note containing a basket of Asian currencies against the U.S. dollar from BNP Paribas last Friday, according to a filing on Bloomberg.
The basket contains equally weighted portions of the Chinese renminbi, the Korean won, the Malaysian ringgit and the Indonesian rupee. The note is not callable, offers 100% participation with no upside cap or downside protection and has a maturity of five years. The note also contains a 1.13% fixed coupon that pays out annually relative to the initial investment, according to a term sheet seen by Derivatives Week.
The official at the bank reported that the note reflects the particular investors steady appetite for emerging market currencies, especially in Asia. He came to us and said I want 100% participation on these currencies, what kind of coupon can you get me? said the official.
The purchase also evidences the fact there are still investors out there looking to put their cash to work before year end, said the official.