Nokia Profit Spurs Biggest Sale of Structured Notes in 14 Years

Banks are selling the most structured notes tied to Nokia Oyj in at least 14 years after the Finnish mobile-phone maker posted its first quarterly profit since the start of 2011.

ING Groep NV, SEB AB and Nordea Bank AB sold a total of $43.5 million of notes tied to Espoo, Finland-based Nokia in January, the most in any month recorded by Bloomberg since 1999. Banks including Citigroup Inc. and Commerzbank AG also issued 2,222 certificates and warrants tied to the company’s stock, 46 times more than in the same period last year, according to data compiled by Bloomberg.

Chief Executive Officer Stephen Elop helped Nokia return to profit in the fourth quarter after pushing through a series of cost cuts, including eliminating 20,000 jobs and skipping a dividend payment for the first time in at least 143 years. The moves signaled to investors the junk-rated company’s revival is starting to gain pace, despite falling revenue and competition from Apple Inc. and Google Inc.

“Nokia is always a popular name for structured notes, but the company’s positive results in January led to exceptional demand,” said Antti Parviainen, Helsinki-based head of investment products for Finland at Nordea.

ING sold 10 million euros ($13.5 million) of five-year credit-linked notes linked to Nokia in two offerings on Jan. 31, paying 6 percent and 6.5 percent. Nordea raised 20 million euros by selling two notes linked to the company in the month. It also raised another 10 million euros from a security tied to the debt of five European corporates including Nokia, Bloomberg data show.

Citigroup Warrants

Citigroup issued 574 securities in January tied to Nokia. They included put warrants where buyers profit if shares drop as low as 2.4 euros, and call warrants, which benefit from a rise in the share price, according to Bloomberg data. Nokia was at 3.04 euros at 10:35 a.m. in Helsinki.

James Etheridge, a spokesman for Nokia, declined to comment on structured notes linked to the company.

Sales of credit-linked notes tied to Nokia are smaller than for other European corporates, including ArcelorMittal and Metro AG, Germany’s biggest retailer. Securities tied to French insurer Axa SA totaled $410.5 million this year, more than for any other corporate, Bloomberg data show.

Before it's here, it's on the Bloomberg Terminal.