UBS has launched Hong Kong's first publicly-registered principal protected notes with returns linked to a basket of blue chip Asian stocks. The SUPER Notes will be offered to retail investors in Hong Kong via a syndicate of retail banks acting as distributors. Linked to a basket of 20 Asian blue chip stocks, which are sometimes called super stocks hence the product name, the structured equity-linked notes are principal protected.
The product has a guaranteed coupon of 4.5% in the first year and variable coupons in years linked to the equity returns calculated from the basket of stocks, with a mechanism to ensure no coupon in years three to five is no less than the previous year's coupon. Stocks comprising the basket include: HSBC Holdings, DBS Group Holdings, Samsung Electronics and TSMC.
The note itself is issued by UBS Ag Jersey and so carries a rating of AA+. A minimum of 100% will be paid at maturity, in addition to the annual coupons. There is no upside limit.
The notes are available between August 4 and August 15. The nine distributing banks include Bank of China, Nanyang Commercial Bank, Dah Sing Bank and Sun Hung Kai Investment Services.
UBS could not give a target amount it hopes to raise given this products is new to the retail market in Hong Kong.
