BNP Paribas Rolls Out Rates Hybrid Offering

BNP Paribas is marketing several cross-asset class structured products from its interest rate desk to combine demand for rates with other recent high-profile economic stories, such as oil prices or the fall of the U.S. dollar.

  • 14 Jan 2005
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BNP Paribas is marketing several cross-asset class structured products from its interest rate desk to combine demand for rates with other recent high-profile economic stories, such as oil prices or the fall of the U.S. dollar. The bank set up a cross-asset trading book to hedge these structures late last year and appointed Chris Hunter, previously in research at BNP in New York, to trade the instruments. Kara Lemont, derivatives product structurer in London, noted low rates mean there is a lot of interest from clients for structured products with features that boost returns.

"We are making a big push on hybrids," said Lemont, who expects it to be a significant business for the French house this year. The bank has already issued structures linked to currencies and oil. One product, called a Fortress Note, has a zero coupon payment profile, but will redeem early at increasing prices if the euro/dollar is below USD1.15 at the end of each year. This structure is being offered in different currencies and with exposure to different interest rates, said Lemont. A range accrual product, in which the coupon's increase is linked to the price of oil, has also proved popular according to Lemont. The products are being sold both to high-net-worth and institutional investors.

  • 14 Jan 2005

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5 Goldman Sachs 218,838.41 733 5.38%

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Rank Lead Manager Amount $m No of issues Share %
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1 BNP Paribas 46,136.68 182 7.00%
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4 Credit Agricole CIB 33,211.72 160 5.04%
5 SG Corporate & Investment Banking 32,419.80 126 4.92%

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3 Citi 9,716.40 55 6.32%
4 Morgan Stanley 8,471.86 53 5.51%
5 UBS 8,248.12 34 5.36%