Citigroup is marketing capital protected notes offering exposure on a broad array of Asian equities to Aussie retail investors. The six-year structure generates income returns as well as capital growth, which the firm believes is a novel feature for this market. The deal is referenced to the 30 largest names of the MSCI AC Asian Index, and is structured using constant proportion portfolio insurance to provide capital protection.
"Australian investors' level of sophistication and interest in overseas markets has been increasing," said Michael Walker, head of equity structured products at Citi in Sydney. The structure will pay investors a quarterly coupon based on the capital appreciation of the stocks, as well as income via dividends and premiums from writing covered call options on the shares. The firm is targeting a late-July close for the product, named Asian Income Plus, and is aiming for a launch size of AUD100 million (USD75.9 million).