Let the right one in

Just like their peers in other markets, Nordic issuers of structured products face a struggle to come up with enticing offerings at a time when interest rates are at record lows and equity implied volatilities are at historic highs. John Ferry reports

Principal-protected notes once dominated the Nordic structured products market, but not any more, explains Peter Frosell, head of structured products business development at Handelsbanken Capital Markets in Stockholm. "Due to low interest rates and high equity market volatility, it has become harder to do capital-protected products," he says.

Low interest rates mean that, once the most common instrument for providing principal protection - a zero-coupon bond - has been discounted, there is only a