JPMorgan Sells Its Largest Structured Note Tied to S&P 500 IndexKevin Dugan
JPMorgan Chase & Co. sold $102.7 million of notes tied to the Standard & Poor’s 500 Index, the bank’s largest such offering since at least 2010.
The one-year securities, issued Aug. 16, yield twice the gains of the benchmark, with returns capped at 15.7 percent and all capital at risk, according to a prospectus filed with the U.S. Securities and Exchange Commission. The bank, which distributed the notes for a 1 percent fee, estimated their initial value at 99 cents on the dollar.
Issuers have sold $5.21 billion of securities linked to the stock benchmark this year, 23 percent less than the $6.76 billion during the same period in 2012, according to data compiled by Bloomberg. JPMorgan has issued $291.2 million of notes tied to the index in 2013, less than half the $585.7 million during same period last year.
Justin Perras, a spokesman for the bank in New York, declined to comment.
The benchmark of 500 U.S. companies, which is the most popular underlying asset for U.S. structured notes, has risen 15.9 percent this year to 1,652.35 at the close of trading today.
Bloomberg started to collect comprehensive data on SEC-registered structured-note offerings in 2010.
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 that have a value derived from stocks, bonds, commodities and currencies, or events such as changes in interest rates or the weather.