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Merchant Capital Growth Plan: Agricultral Commodities Issue 3

11 March 2011

Merchant Capital Limited (“MCAP”) has launched a third tranche of the popular Merchant Capital Growth Plan: Agricultural Commodities (the “Plan”) offering investors exposure to an equally weighted basket containing the commodities, sugar, soybeans, corn and cotton. The Plan improves on the first two tranches by offering investors 1.3 times the growth of the basket in five years time. It also offers investors 95% hard capital protection at maturity which applies whatever the performance of the underlying commodity basket.

The Plan’s key features are:

  • A five year, two week term from the investment date.
  • Linked to an equally weighted basket of Sugar, Cotton, Corn and Soybeans.
  • The closing level of the commodities basket is based on the average of 13 observations over the final year of the Plan. The growth payment will be 1.3 times the growth of the basket. The potential increase is uncapped although returns are subject to counterparty risk.
  • The return of 95% of capital at the end of the term is protected but is subject to counterparty risk. Therefore if the average performance of all the commodities in the Plan’s basket is negative over the term of the Plan, investors may lose up to, but no more than, 5% of their capital.
  • Available as a direct investment but not for ISAs.
  • Eligibility: for individuals, companies, pension funds, trusts and charities.
  • Minimum investment is £5,000 up to a maximum of £2m.
  • Securities are issued by Barclays Bank Plc rated ‘AA-’ by Standard & Poor’s as at 25/02/2011.
  • This is a capital at risk product and an investor could lose up to 5% of their initial investment.

John Gracey at Merchant Capital commented,

“We are pleased to be offering a third tranche of the Agricultural Commodities Plan to accommodate strong demand from our clients. It offers investors uncapped exposure to a basket of commodities which we see as having tremendous investment potential. World population continues to grow, boosting the demand for life’s basic necessities and the world is undergoing considerable climatic uncertainty, some would argue as a result of global warming, which is seeing areas that produce these commodities suffering extreme weather conditions. A growing interest in bio-fuels has added to the worldwide demand for agricultural commodities.

Our new Plan offers investors both 1.3 times the potential growth of these commodities and at the same time provides capital protection of 95%. This protection level stands whatever the performance of the underlying commodity basket. The most investors can lose, therefore, is 5% of their capital (subject to the ongoing solvency of the Plan’s issuer, Barclays Bank plc).

Structured products continue to receive a bad press from many quarters. This is disappointing, especially when the criticism is partial and ill-informed. Merchant Capital is pleased to produce a growing range of structured deposit and structured product offerings which provide significant downside protection to investors together with pay-offs which are clear and easy to understand. I am confident that structured products will continue to play an important role within investors’ balanced portfolios”

Key dates:

Direct Investment Close:            31 March 2011
Investment Date:                    7 April 2011
Initial Level:                          7 April 2011
Final Level:  Final year averaging each month from and including     7 April 2015 to 7 April 2016 (13 observations)
Maturity Date:                        21 April 2016

IFA commission: 3% of the sum invested. Counterparty information, back-testing and suitability statement packs for interested IFAs are available. Contact details below or refer to http://www.merchant-capital.com
ENDS

Merchant Capital Limited is authorised and regulated by the Financial Services Authority (firm no. 220131).

For further information please contact:-

Merchant Capital
0207 332 2205
Sales Team

Notes to Editors – Merchant Capital Limited

MCAP offers a range of attractive and innovative structured products providing either income or capital growth both to individual investors and IFAs. The philosophy of the business is to have a range of products offering differing investment solutions available throughout the year. In addition, the company will undertake joint ventures with other financial organisations, as well as construct bespoke solutions for advisers to white label and for one off investment requirements.

The company offers underlying assets which are both mainstream, such as FTSETM100 index based structures, as well as more innovative ones relating to commodities or emerging markets.

 

Merchant Capital Limited
Aldermary House
10-15 Queen Street
London EC4N 1TX
United Kingdom
Tel: +44 (0)20 7332 2200