Gilliat Financial Solutions, a unit of Arbuthnot Banking Group Plc (ARBB) that designs structured products, created its first securities for investors outside the U.K.
Gilliat constructed five-year notes linked to the performance of global equity indexes that were sold by Royal Bank of Scotland Group Plc and Credit Suisse Group AG (CSGN) on May 4, according to data compiled by Bloomberg.
The notes were London-based Gilliat’s first to be sold outside of its home market, where it distributes structured products to individual investors through financial intermediaries such as independent financial advisers, or IFAs, said Adrian Neave, managing director of Gilliat.
“Product design has been our core business, but we are also building our distribution channels, first to U.K. IFAs and now for retail investors based outside the U.K.,” Neave said.
The notes, which were offered in euros, dollars and pounds, were sold through IFAs that offer advice to U.K. citizens living or working abroad. The company planned to attract between $5 million to $10 million of investment, said Andrew Savill, who was hired from RBS in December to develop the company’s international business. He declined to disclose sales figures.
Investors in the securities issued by RBS, which are linked to the FTSE 100 (UKX), Standard & Poor’s 500 Index (SPX) and the Hang Seng China Enterprises Index (HSCEI), get a maximum annual coupon of 12.25 percent if all three indexes are equal to or above 70 percent of their closing price on April 27, data compiled by Bloomberg show. The notes terminate early on any anniversary date if all the benchmarks are equal to or above the initial value, and capital is lost if any of the indexes are less than half of that level at maturity.
Credit Suisse’s notes are tied to the FTSE 100 and the S&P 500 and pay a maximum 7.5 percent a year, according to an offer document for the securities. Investors lose their principal if one or both of the benchmarks decline 60 percent or more from their April 2012 level.
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