ABBEY NATIONAL has launched an innovative high yield index-linked bond in a move capitalising on the recent upsurge in interest in high yield debt. Launched by Merrill Lynch, the $100m issue is linked to the performance of the US bank's High Yield Master Index, with redemption equal to par plus 80% of the return on the index. The 20% of lost participation effectively represents payment for obtaining a double-A rating on the underlying security as well as the 100% capital protection.
July 24, 1998