The purpose of this seminar is to give you a good understanding of "structured products", how they are constructed and their uses for financing, investing and risk management purposes. For each product, we explain the product's mechanics, uses and suitability for investors.
First, we introduce different types of "Structured Bonds and Notes" and review their risk and reward opportunities from both the investor's perspective and that of the issuer. Examples include "Reverse Floaters", "Bear Notes", "Capital Market Floaters", "Capped Floaters" and "Fairway Bonds". We explain how these products are used to obtain leveraged investing, reduced financing costs, or to create "tailored" exposures to changes in the level or shape of the yield curve.
Next, we look at selected credit-linked structures such as credit-linked notes, leveraged credit linked notes and CDO's. We explain how these instruments are used to "repackage" and transfer credit exposures and how they are used by investors to obtain "yield enhancement".
Further, we look at structures with mixed interest rate/equity exposures. Examples include best of equity/interest rate and interest swaps triggered by equity level.
We then present and analyze a number of different equity-linked structures, including various examples of "Principal Protected" structures, "Guaranteed Bonds", "Reverse Convertibles" and many others.
Further, we examine some commodity and currency-linked structures. These include "Dual Currency Loans", "Reverse Dual Currency Loans" and "Quanto" structures, where the currency risk has been hedged dynamically or using "Quanto Derivatives".
We present and explain examples of exotic/path-dependent structures such as "Step-up Bonds", and bonds with knock-in/knock-out features etc.
Finally, we discuss some important regulatory issues in buying and selling structured products. Our main focus here will be the "Markets in Financial Instruments Directive" (MiFID) which implies a higher degree of investor protection.