US Wrap: JP Morgan interrupts US equity whitewash with China note
In a day dominated by exposure to US equity, JP Morgan took investors in a different direction by offering a note linked to Chinese blue chip companies. The product is a two-year autocallable note linked to the iShares FTSE/Xinhua China 25 Index fund, which tracks 25 of the largest and most liquid Chinese stocks trading on the Hong Kong Stock Exchange. If the index is at or above its level at strike after one year, then the structure kicks out with a return of 20-22%. Should the product continue, subsequent observation dates are six months apart and will pay respective coupons of 30-33%, and 40-44%. The structure incorporates a relatively narrow protection barrier of 10% on the index, beyond which principal is not protected at maturity.
The rest of the day's issuance focused on the S&P 500, alongside three US stocks in three reverse convertible notes from JP Morgan, including Caterpillar, Goldman Sachs for the second day in a row, and General Electric. Merrill Lynch launched an accelerated growth note linked to the Russell 2000 index, which incorporates small-cap US stocks. It opted to use the external paper of Swedish Export Credit to issue the product.
Issuer
Product type
Underlying
Pricing date
Maturity date
Swedish Export Credit
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