Following the launch of its debut Lion equity linked notes (ELN) in January, ING has rolled out a second series of the ELN in Hong Kong.
Similar to the January series one offering, ING has included an equally weighted stock basket of some of the territory's bluest-chips. The second series offers a potential return of 40.92% and a minimum total coupon payment of 11% over the two-year tenor of the investment.
Whereas the first round drew its upside potential from a sectorally diverse basket, the second series of the Lion equity linked notes consist of five Hong Kong financial and property firms that include Cheung Kong Holdings, China Life Insurance, Henderson Land Development, HSBC Holdings and Sun Hung Kai Properties.
According to ING the constituent stocks were selected due to their respective historical track records and the positive outlook for both sectors.
Returns to investors will be derived from a link to the quarterly performance of the basket, which in turn will determine the level of annual coupons beyond a guaranteed 5.5% return. As with the debut offering, positive returns of the selected stocks are locked-in up to a maximum of 18.6% per year and negative returns will be disregarded by locking-in at 0%.
A participation rate of 110% is also included to enhance potential returns for investors.
ING stresses that the second phase of the Lion equity linked notes will be targeted at a similar investor demographic as its January offering, appealing to investors seeking higher returns than alternative short-term investments, and those who do not require the safeguard of principal protection.
The lion equity linked notes series II will be open for subscription from 19 April until 10 May. Distribution of the equity linked note is available through 13 banks in Hong Kong that consist of Asia Commercial Bank, Bank of China (Hong Kong), Bank of Communications (Hong Kong Branch), Belgian Bank, Chiyu Banking Corporation, CITIC Ka Wah Bank, Fubon Bank (Hong Kong), ICBC (Asia), Liu Chong Hing Bank, Nanyang Commercial Bank, Shanghai Commercial Bank, Wing Hang Bank and Wing Lung Bank.