Legally, structured products are bonds (claims), so the default risk of these securities (the same as for bond issues) depends on the credit worthiness of the issuer or provider of security. This is the reason that issuers’ or security providers’ credit ratings should influence structured product choices.

The SSPA regularly publishes the credit ratings of its association members. The list is sorted alphabetically according to the organisational units (issuing vehicles) of the issuers that issue the structured products. In addition, credit spreads and core capital ratios (Tier 1 ratings) allow further indications of the creditworthiness of issuers and are described in summary form below. The relevant information is available from the respective issuing houses.

Credit ratings refer to the issuer, or provider of security in the case that claims against the issuer are covered by a guarantee or other security, such as letter of responsibility or keep-well agreements. In the latter case, the nature of the security is also stated. This information, together with a structured product’s term sheet, allows investors to quickly and simply determine liable parties and the extent of their liability.

Credit Ratings

Credit ratings refer to the respective provider of the guarantee. In principle this is the group’s parent company (special cases are described). Individual credit ratings by Moody’s, S&P and Fitch are shown separately. The rating agencies have not assessed all issuers.

Credit Spreads

Credit spreads help investors to obtain a better understanding of an issuer’s or security provider’s creditworthiness. The information refers to corporate bonds of one-year and five-year duration respectively. The base points listed represent the investor’s hypothetical insurance premium to cover against the default of the issuer’s structured products. Credit spreads provide more accurate and current creditworthiness information on issuers. A small spread typically indicates high creditworthiness.

Core Capital Ratio (tier 1 ratings)

The «tier 1» core capital ratio (according to Basel II) is the ratio of core capital and risk-weighted credit amounts. The core capital is made up of the share capital, disclosed reserves and profit carried forward. Equity requirements according to Basel II require a minimum tier 1 rating of 4%.

Important

Please note that issuers’ rating, credit spread and core capital ratio are only three of several criteria influencing the choice of a structured product. The information below should not be considered investment advice, nor does it constitute an offer or recommendation to buy or sell a product or take the place of a person-to-person consultation. Rather than investing in a single product, we recommend diversification. This prevents a single product in an investment portfolio from gaining too much weight, and in cases of default having too great an effect on the portfolio’s overall value.

The SSPA and the issuers listed are in no way responsible for the completeness or accuracy of the information. No special verification procedures were performed.