Credit Suisse Sells Structured Notes Tied to Gold-miner Index

Credit Suisse Group AG (NYSE:CS) has sold about $24 million in US structured notes linked to an  index made up of 40 gold miners. Though the index has dropped this year, the successful offering might indicate a change in sentiment as investors are once again starting to believe in gold.

As quoted in the publication:

The securities, issued Nov. 25, pay three times the gains in the NYSE Arca Gold Miners Index, with returns capped at 41.25 percent, according to a prospectus filed with the U.S. Securities and Exchange Commission. If the index falls, investors lose a proportionate amount of principal.

The gold miners index, which declined to a six-year low on Nov. 5, is made up of 40 companies, including Barrick Gold Corp. and Newmont Mining Corp. Investors have bought $134.3 million of notes so far this year linked to either the gauge or an exchange-traded fund that tracks it, down 40 percent from last year, according to data compiled by Bloomberg.

RBC Capital Markets precious metals strategist George Gero said:

I think you’ll see people are becoming more interested in mining stocks as the price has come down on gold … At this point, the mining stocks are probably a very cheap entry.

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