U.S. Structured Warrant Programs:
Introduction -
U.S. and non-U.S. banks have offered structured warrants in the U.S. to address the needs of both institutional and high-net worth investors. This article will describe these instruments, how they are offered, and summarize the programs that are used to offer them.
What Are Structured Warrants? -
Structured warrants are a form of structured security which are designed to have many of the features of warrants or options over a reference asset. They are typically issued by financial institution issuers, such as bank holding companies. They are purchased with cash, and any required payments to the investor may be made either in cash or “in-kind,” such as in shares of the relevant stock covered by the warrant, depending on the terms of the relevant instrument. Sample structured warrant terms are in the box set forth below.
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