Deutsche Bank negotiating Asia 5 Appreciation notes; Goldman plans index-linked notes

By Sheri Kasprzak

New York, June 14 - Deutsche Bank AG, London Branch led structured products news on Thursday with its plans to price Asia 5 Appreciation notes, notes linked to five Asian currencies.

"Asia has been an area of interest for quite some time," said one distributor on Thursday. "I'd say over the past year or so, there has been this explosion of things like to Asian currencies and indexes, and from everything I've seen, the interest is still out there.

"I don't think these are going away any time soon. It used to be mostly the [emerging market] countries that you would see but now places like Japan and Singapore are getting more and more play."

This basket includes equal weights of the Japanese yen, the Indonesian rupiah, the Indian rupee, the Chinese renminbi and the Malaysian ringgit.

The basket pays par plus the basket performance times a participation rate expected to be 150%, assuming the basket performance is greater than zero.

If the basket performance is less than zero, investors will receive par at maturity.

Currency performance

Most of the exchange rates of the currencies in the basket have slumped since the month prior.

The Japanese yen, which was trading at $0.0083 on May 14, ended at $0.0081 on Thursday.

The Indian rupee ended at $0.0245 on Thursday after trading at $0.0245 a month ago and the Indonesian rupiah, which traded at $0.0001 on May 14 also ended at that level on Thursday.

The Chinese renminbi closed at $0.1311 on Thursday and traded at $0.1302 on May 14.

The Malaysian ringgit, which has been a popular currency within Asian currency baskets lately, traded at $0.2886 on Thursday after ending at $0.2939 on May 14.

Goldman plans offering

In other structured products news, Goldman Sachs Group, Inc. is planning to price zero-coupon principal-protected notes linked to a basket of indexes that includes the S&P 500, the MSCI EAFE, the iShares MSCI Emerging Markets Index Fund and the Topix indexes.

The S&P 500 has 60% weighting, the MSCI EAFE 25% weighting, the iShares MSCI has 10% weighting and the Topix index has 5% weighting.

The zero-coupon notes pay par plus the face value times the basket return, capped at between 7% and 7.25%, at maturity if the basket return is positive.

If the basket return is negative, investors will receive par at maturity.

Index performance

Looking to the performance of these indexes, the S&P 500 gained 7.30 on Thursday to close at 1,522.97. On May 14, the index closed at 1,503.15 and on April 13 it closed at 1,452.85.

The MSCI EAFE index closed at 2,234.95 on Thursday. A month prior, the index closed just above 2,240.

The iShares MSCI Emerging Markets Index Fund's net asset value on Wednesday was $126.92. The fund's net asset value at inception on April 7, 2003 was $33.75.

The Topix index gained 10.72 on Thursday to close at 1,756.64. A week ago, the Topix index fell by 9.53 to end at 1,751.62.

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