SG Corporate & Investment Banking is gearing up for a pipeline of commodity-linked retail transactions in Hong Kong, following its debut deal earlier this summer. The move is also a response to investor demand for new underlying.
"This is a new asset class that will allow investors to diversify their portfolio in a more prudent way," said Connie Leung, managing director in fixed income and derivatives at SG in Hong Kong. She noted that as its first commodity-linked deal was well received by investors (DW, 7/14), the French house is now in talks with regulators in Hong Kong regarding additional issuance. "We should have a good pipeline in place," she said, adding a few deals should hit the street before year-end.
The notes will likely reference precious metals with a capital guarantee and an autocallable feature on selected observation dates. Maturity will be less than three years, which was the time selected for the first deal, given investors' preference for shorter-dated transactions in Hong Kong.
