Credit Suisse Group AG sold $31 million of one-year notes tied to Priceline.com Inc., more than five times the size of the next-biggest such offering.
The securities, issued May 15, pay an 8 percent coupon as well as 65 percent of the stock’s gains above 115 percent of its initial value, according to a prospectus filed with the U.S. Securities and Exchange Commission. Investors take losses, capped at 27 percent, if shares fail to climb at least 9.5 percent or decline, the filing shows. The bank valued the notes at 99.7 cents on the dollar.
Since the sale, shares of the biggest U.S. online-travel agent by market value have risen about 5 percent through yesterday to $842.50.
Priceline is “by far the largest player in Europe today” through its Amsterdam-based Booking.com website, said Aaron Kessler, an analyst at Raymond James & Associates in San Francisco. Raymond James increased its 12-month target price for the stock to $850 on May 9.
Katherine Herring, a New York-based spokeswoman for Credit Suisse, declined to comment.
Morgan Stanley issued $5.4 million of six-month notes tied to the company on Nov. 23, 2010, the next-largest U.S. offering.
Banks create structured notes by packaging debt with derivatives to offer customized bets to retail investors while earning fees and raising money. Derivatives are contracts whose value is derived from stocks, bonds, commodities and currencies, or events such as changes in interest rates or the weather.