By jointly placing a synthetic convertible with another bank, SG has hit upon a relatively simple way to widen substantially the appeal of the product.
Synthetic convertibles are convertibles issued by a bank that convert into shares of another company.
Although they could help convertibles investors suffering from the 18-month dearth of new issuance, the promise of synthetic convertibles has yet to take off, as many investors have been held back by multi-establishment listing rules that prevent them from holding the product because they have only one market maker.
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