PanEuroLife, a Belgian insurance company, is offering investors an equity investment product which provides both income and growth. The note is innovative in that it offers investors both an income coupon plus potential growth on the capital invested.
The ten-year structure consists of a basket of equity call options with a look-back feature to record their growth. SG Corporate & Investment Banking is the derivatives counterparty and structured the deal for PanEuroLife. Each year, the top two performing shares are frozen and the performance of the basket recorded. Investors receive a guaranteed 4.1% annual coupon, which after the first two years is linked to the performance of the basket with the potential to rise over 10%. At maturity, capital is returned to investors along with 75% of the best-recorded annual growth of the basket.
A marketing official at PanEuroLife in Luxembourg said the deal is being offered to retail investors. The insurance company has worked with SG CIB on several structured products in the past and will look to offer a repeat of this structure if it is popular, added the official.
