Credit Linked Note (CLN) - Fasträntebevis
CLN is linked to the credit risk in a company or an index. For example, the Fasträntebevis on Volvo Cars is linked to the credit risk in Volvo Car AB. For an index, it is linked to the credit risk of the companies included in the index. In addition to the credit risk in the underlying company or companies that the product is based on, an investor also faces credit risk of the issuer Nordea Bank Finland Plc.
Each Fasträntebevis has a fixed term, normally five years at the time of issuance, and one of the key characteristics is that it offers a fixed interest payment. The interest is paid on a quarterly basis and usually, a high interest rate reflects high credit risk. A benefit of the fixed interest rate is that the investors will know what amount to expect to receive each quarter. If no credit event has occurred during the term, the nominal amount for each Fasträntebevis is paid back to the investor at maturity, in addition to the quarterly interest rate payments.
CLN (Fasträntebevis) is one of the products offered by Securities Finance, Structured & Equity Trading unit within Nordea Markets.