ABN AMRO has a launched a hybrid structured note for the Korean retail market in a bid to offer higher coupons amid falling equity volatility. "Vols have steadily been decreasing and investors can't get high enough yields so they are looking at including other assets including commodities," said S.K. Hong, director at ABN in Hong Kong.
Traditionally popular worst-of stock-linked structures have been interwoven with for example a worst-of bucket between commodities such as oil and precious metals. "There's been a lot of press for commodities and investors are getting more interested," said Hong, noting that while ABN has so far only kicked off a handful of the deals in recent weeks it expects good demand going forward. Such deals are sold via domestic Korean banks and have developed into a massive multi-billion dollar business in the last few years.
