Credit Suisse Group AG (CS:US) sold $171.4 million of one-year securities tied to the Hang Seng China Enterprises Index and the Chinese yuan, the bank’s largest structured note in at least three years.
The securities, issued Feb. 1, yield twice the gains of the benchmark adjusted for the exchange rate between the dollar and the offshore renminbi, with a cap of 32.5 percent, according to a prospectus filed with the U.S. Securities and Exchange Commission. If the index declines, the notes suffer identical losses, with all principal at risk. JPMorgan Chase & Co. charged a 1 percent fee to distribute the securities.
The Hang Seng China Enterprises Index has gained 2.2 percent this year to 11,681.96 as of the close on Feb. 7.
Katherine Herring, a spokeswoman for the bank, declined to comment on the offering. The sale is the bank’s largest since Bloomberg began collecting comprehensive data on SEC-registered structured notes 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 whose value is derived from stocks, bonds, commodities and currencies, or events such as changes in interest rates or the weather.
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