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CAPITAL MARKETS

US structured note issuers remain upbeat

The collapse of Lehman Brothers has made investors wary of derivatives-based investments, but the US structured notes industry remains confident the market will grow.

Opportunities to sell products to investors, touting particular risk-averse structures, could even help the nascent market gain a stronger foothold in the US. That was the message from speakers at US trade body the Structured Products Association’s (SPA) autumn expo in New York, which took place on October 2.

"There is a lot of optimism because this is a sector of the market that has held up relatively well compared with other sectors in the US," says Anna Pinedo, a partner with law firm Morrison & Foerster, which provides legal counsel to structured note issuers. Pinedo was a panellist at the conference.

Opening the conference, Keith Styrcula, New York-based chairman of the SPA, said the collapse of Lehman and the domino restructuring of US banks that followed was a big disruption for the structured products industry. He said the events were "not the making of the industry" and that they are likely to cause big changes. "We know that the landscape will never be the same," he said.

However, he added that the upward trend in volumes overall continues. Structured products issuance in the US was $64 million in 2006 but jumped to $114 million last year.