New Products

Switzerland's Leonteq Partners With Bank For New Structured Products "Hub"

Editorial Staff 15 July 2022

Switzerland's Leonteq Partners With Bank For New Structured Products

The business model is designed to cut the costs to banks of bringing structured products to market, and also speed up development and launch times, Leonteq, which is listed on the SIX exchange, said.

Switzerland-listed structured products provider Leonteq has rolled out its first products with VP Bank as sponsor and structuring hub. The hub is designed to bring offerings to the market more rapidly and reduce the costs to banks for using the Leonteq system.

Leonteq is now offering a new standardised issuance model for private, commercial and retail banks which allows them to pivot from being an intermediary to a producer of structured investment products. Banks joining Leonteq’s ecosystem for investment solutions as a sponsor get access to its services and digital tools. Leonteq will act as the initial hedger and, at a later stage, plans to offer best option prices via its balance sheet light business, including its Smart Hedging Issuance Platform (SHIP), it said in a statement.

To get the new business model off the ground, structuringHUB SA – as it is called – has been established as a standalone securitisation undertaking in Luxembourg independent from Leonteq. It will issue structured products which will be guaranteed by the sponsors. Leonteq will act as the arranger, providing its longstanding expertise as well as its full technology platform and a broad range of services along the entire value chain.

Sponsors will obtain access to the product and service offering of Leonteq while only providing standard commercial banking services in the context of the issuance by structuringHUB. 

As previously announced on 17 January 2022, Leonteq and VP Bank are cooperating to make and distribute structured products. In the weeks since, VP Bank has become the first sponsor under this new white-labelling issuance model and will use Leonteq’s LynQs platform to price, trade and distribute VP Bank-guaranteed structured products issued by structuringHUB to its clients. 

“The innovative issuance model of Leonteq enables us to provide structured products in a highly automated and efficient manner. This allows us to improve our client offering and demonstrate investment expertise via tailor-made structured products, while limiting the complexity of the issuance process,” Paul Arni, CEO of VP Bank, said. 

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