Vontobel, the Swiss private bank, has announced the issue of collateral secured theme certificates, a type of structured product which claims to protect investors by taking Vontobel bonds as collateral.

Collateral secured certificates will be issued on asset classes ordered thematically. For example, equity themes include Swiss industrials and renewable energies. The products will be traded on the new Collateral Secured Instruments segment of the derivates exchange, Scoach. 

“If you use a structured product the buyer has the counterparty risk, so if we, the issuer, default then they risk losing their investment. We are trying to avoid risk by giving them collateral, which are bonds issue by Vontobel held by the Swiss exchange. If we default, the bonds are given out to investors by the exchange,” said Georg von Wattenwyl, head of Advisory & Distribution, Financial Products at Bank Vontobel, speaking to WealthBriefing.

“Last year many people holding structured products with Lehmans as the counterparty lost money. To avoid this…we decided to issue these collaterally secured products,” Mr von Wattenwyl added.

As at 30 June 2009, Vontobel’s assets under management totalled SFr65.0 billion ($62 billion).