Volatility Rises, Structures Surge!
mtn-i is excited to announce its 13th Americas Structured Note Awards in a period when volatility across asset classes and rising rates drove the biggest year in a decade for the US structured products market.
New structuring techniques enhanced value for investors, including the use of AI and key consolidations in the digital platform space set the scene for a revolution in distribution and the potential for this market to connect with advisors and investors.
US sales grew 15% to USD65bn as manufactures and distributors delivered an expanded toolbox of solutions to navigate choppy equities, volatile rates and swings in other asset classes that defined the last 12 months.
mtn-i’s mission to reveal how structured products constantly evolve to meet investor needs in response to market conditions and identify the market’s most relevant themes and growth stories always drives our award decisions.
For the first time we are announcing and presenting our Americas awards grouped by these themes – spotlighting more clearly the range of the market’s solutions and relevance to investors in each case and the firms leading their innovation.
This also highlights which themes are finding the strongest traction with investors as verified by mtn-i’s data.
Digital Distribution & AI Indices
Online distribution platforms have reached a jumping-off point as issuers and dealers scramble to find new and more efficient channels to reach a widening pool of buyers.
The new found independence of SIMON, and its onboarding of the leading manufacturers as equity partners, the continued innovation and independence of HALO, and the consolidation of two of the market’s deepest distribution channels into LUMA, have inspired manufacturers, issuer and advisor to see digital execution and distribution as reaching critical mass in its potential to be powerful force in driving the market’s future – and earning them a collective Editor’s Award.
SIMON is also scooping a Market Futures Award for leading the growing enthusiasm for the online distribution of structured notes and transforming the conversation around multi-issuer platforms.
In the proprietary index space Credit Suisse utilised RavenPack‘s artificial intelligence algorithms to leverage hard and soft data to create the Artificial Intelligence Sentiment Index. The benchmark harnesses the power of ‘big data’ analytics to make sector allocation decisions.
Investors have sought ways to monetize and hedge against volatility in the equity-linked market with overall sales increasing 10% to USD57bn. Helping buyers get a pick-up on the downside UBS led the issuing and distribution of index-linked bear notes while JP Morgan worked with Advisor Asset Management to print a unique stock structure.
The US investment bank’s Manufacturer award also recognises its pioneering of dual-direction worst-of products while BNP Paribas brought a growing number of RIAs to the structured note arena with bespoke solutions.
Meanwhile, Canadian investors looked to stock-linked structures to find returns in a more volatile environment with Bank of Montreal providing the greatest number of tickets to the market.
The rally in US dollar interest rates led to more than a doubling in fixed-rate callables, step-ups and structured floaters, jumping to USD4.5bn. Toronto Dominion built on its strong credit quality and substantial distribution channel to print some of the largest fixed and floating-rate structures seen in recent years to both institutional and retail client.
Corporate credits also found traction in this environment with Incapital providing retail with access to Caterpillar, Ford, General Motors and Verizon while Toyota Motor Finance Corp made its landmark debut outing in the US retail space, issuing USD2bn in IncomeDrive Notes.
Meanwhile, interest rate swap-linked products alongside structures such as range accruals found renewed demand. Bank of America straddled trends in both complex and more lightly structured products, quadrupling its issue volume and landing it a Power Performer Award.
Range accruals returned to the GSE space care of FHLB. Barclays, Morgan Stanley and Stifel Nicolaus all found demand for the re-emergent structure. Barclays led innovation in US dollar CMS pushing a USD20m series of principal-at-risk paper linked to the 10-year rate.
Providing Mexican investors with a solution to falling returns on traditional rate-linked products BBVA opened the market for notes linked to TIIE swaps. An uptick in rates also prompted the appearance of floating coupons in the ELN market with Bank of Nova Scotia pioneering the product in Canada.
As inflation rose investors demanded structures linked to US CPI. Notes on the measure exceeded USD300m for the first time in seven years. Barclays led the growth with multiple structures providing 40% of the market volume.
Greater volatility also birthed new multi-asset solutions to compete against more traditional products. Citi found traction with best-of multi-asset portfolio plays tackling a high degree of market uncertainty.
Credit Agricole has sown the seeds for growth in the bank-issued structured green market leading the way in green products to retail through a series of rate and equity-linked notes while also placing the largest ever FIG US green structure.
Attractive pricing opportunities in oil futures-linked notes fuelled a 13-fold increase in issues. Morgan Stanley, as both an issuer and a dealer, accounts for over 40% of the market.
The World Bank cemented it position as a leader in solutions-focused new structures becoming the only supra active in commodity-linked issues with a unique floating rate, callable, puttable product.
Against increasing competition from a growing number of rivals our House of the Year Awards recognise the strongest performances overall in structured notes across the Americas.
In the US JP Morgan stands as the benchmark against which other names compare themselves growing its business by 10% and gaining market share. Leading volume and innovation in the equity-linked space across structures and underliers, the name is also competitive across asset classes and channels of distribution making it our Manufacturer of the Year.
The World Bank, mtn-i’s Americas Issuer of the Year, spread recognition of its name across institutional and retail clients with a range of structures targeting the US and LatAm.
Meanwhile, Goldman Sachs has provided leadership in rates, across light and complex structures, while Societe Generale supplied volume and innovation in the 3a2 market. Among broker-dealers Incapital stands out for wide spread distribution of structured products from a range of credits.
CIBC has been spotted at the front of many of the recent trend in Canada’s structured note market including single stock notes on a variety of domestic and foreign underlyings, hybrid index linkers and oil future plays. For its innovation in onshore deals in Mexico and Brazil alongside its third-party structuring Citi wins a Latin American Structurer of the Year Award.
For their overall performances in the US two Canadian names rose to prominence. National Bank of Canada rocketed out of the starting gate with USD800m of ELNs issued while Bank of Nova Scotia expanded its output in equities and rates, bringing in new distribution channels and going toe-to-toe with the biggest names in the third-party space.
Book your seat now for our poolside Showcase and Awards on April 4th and don’t miss the inspiration and company of Americas’ most creative and influential structured note players.