ABN AMRO recently rolled out its first retail deal in China following new regulations that have opened the door for offshore structured products. Regulators in China gave the green light for investment in overseas fixed income assets through the Qualified Institutional Investor Scheme, which has been attracting interest from international derivative players (DW, 8/28).
In the first batch of structures, the Dutch house is offering U.S. dollar-denominated fx-linked notes on the euro/U.S. dollar pairing with a double no-touch feature. For example, note holders receive an above market-rate coupon if EUR/USD trades within a range of 500 basis points over the next three months, with the range resetting quarterly. If upper or lower barriers are breached no coupons are allotted for the quarter.
The bank is looking to offer a wide array of products for the nascent market, mainly fx and fixed-income structures distributed under ABN branding via domestic banks. "We're trying to provide a lot of ideas for the China market," said Vince Leow, fixed-income trader in global markets based in Hong Kong. The firm is also educating clients on the concepts, via meetings and conferences.
