Fortis Bank is marketing its first global sector click notes and has used over-the-counter derivatives to structure the product. Koen Zoutenbier, senior account manager on the derivatives and structured products desk in Amsterdam, said the product is structured by purchasing a zero-coupon bond and a click option.
The five-year click option sells the highest performing of the 10 sectors at the end of each six month period. Zoutenbier said this allows the investor to benefit from a boom in the sector, "the outperformer of today is the underperformer of tomorrow," he added. This structure is also approximately 25% cheaper than a plain-vanilla option, which means Fortis can offer a 100% participation in the upside of the sectors. The sectors include, biotechnology, finance and telecoms.
Zoutenbier expects to sell EUR20-30 million (USD18-26 million) of the notes.
