Deutsche Bank plans to launch its first structured product based on the iBoxx index within the next two weeks. iBoxx is a European fixed-income index jointly compiled by seven market makers to provide transparent pricing of investment-grade corporate bonds. The five-year note will synthetically replicate the weightings of the entire corporate portion of the iBoxx index, which includes around 450 names, according to an official at Deutsche Bank.
The firm plans to issue a minimum of EUR50,000 in notes in denominations to investors of EUR500 million (USD495.73 million). The notes will have the exact market weighting of the iBoxx corporate index and will rebalance automatically without Deutsche Bank needing to reissue the notes.
ABN AMRO launched a credit-linked note which was referenced to the iBoxx index's 50 largest corporates by outstanding debt in July (DW, 7/1). It plans to increase the size of the note to EUR750 million from its original size of EUR500 million this week.