Picking up the pieces

The recent fall in global stock markets has resulted in mark-to-market losses for investors in worst-of equity-linked notes, which have been hugely popular in Asia during the past two years. Rahul Jhaveri examines how dealers are restructuring these products

Equity-linked notes (ELNs) with worst-of options have been a staple of Asia's structured products business in the past three years, with dealers estimating a total volume of transactions across the region, including Japan, of at least $80 billion in the past year. However, the correction in global stock markets during May and June has left many investors holding zero-coupon notes with mark-to-market losses of around 20-30%, dealers say.

Consequently, clients are now asking banks to restructure