US Wrap: JP Morgan launches kickout on gold equity fund

JP Morgan has unveiled a new autocallable note linked to the Market Vectors Gold Mining ETF. The 18-month investment will pay a coupon of 5.25-6.25% if the fund is at 100% of its initial level after three months. If not, the product will continue to its next observation date, in December, when the payout will be 10.5-12.5%. Observation dates are every three months through the life of the product, and the final payout at maturity will potentially be 31.5-37.5%, if the product does not kick out before then. Capital loss will occur if the fund falls below 60% of its initial value and fails to recover to 100% by maturity.

The kickout was accompanied by a smattering of other structures on a busy day for the market. Eight reverse convertible notes appeared, including two from provider Wachovia structured using the external credit of Eksportfinans. Barclays also issued a bullish emerging markets play, which offers 150% participation in the iShares MSCI Emerging Markets Index Fund and a 20% downside buffer over a two-year exposure period.

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JP