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SBD Global/August 31, 2012/Finance

Manchester United Shares Winning Structured Product Investors

Investors are "buying structured products that profit on gains" in shares of ManU following the EPL club’s IPO, according to Alastair Marsh of the FINANCIAL TIMES. Royal Bank of Scotland issued eight "mini futures" since the club’s U.S. stock issue on Aug. 9. The securities were priced in Swedish krona, euros and Swiss francs and offer investors "leveraged exposure to the stock," which has fallen 3.1% from its $14 IPO price. RBS' London-based Head of Public Distribution Christian Bahrne said investors were drawn to the club’s “proven track record on the pitch and the potential to profit from increasing media revenue.” The mini futures, the first structured products tied to the 134-year-old club, were "bought by individual investors in Scandinavia." The mini futures include two parts, a "cash investment from an investor and a loan from the issuing bank." To leverage the product, an investor will pay 500 krona ($75) and borrow 500 krona, receiving 20% for every 10% gain in the stock and losing 20% for every 10% fall (BLOOMBERG, 8/30).
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